Ecolab(US:ECL) ZACKSยท2024-10-29 17:01Core Viewpoint - Ecolab Inc. reported strong year-over-year growth in both adjusted earnings per share (EPS) and revenue for the third quarter of 2024, despite some mixed results across its segments [1][13]. Revenue Details - Ecolab's revenues for the third quarter reached $3.99 billion, reflecting a 1% increase year over year, but fell short of the Zacks Consensus Estimate by 0.8% [2] - Organic sales increased by 3.9% year over year, driven by strong growth in the Institutional & Specialty and Industrial segments [2]. Segmental Analysis - The sale of Ecolab's global surgical solutions business to Medline for approximately $950 million in cash was completed in August, but the company continues to serve hospitals through its infection prevention and instrument reprocessing businesses [3]. - The Global Industrial segment reported fixed currency sales of $1.99 billion, showing a 2.7% growth year over year, with organic sales up 2% due to strong Water sales growth [4]. - The Global Institutional & Specialty segment's fixed currency sales were $1.40 billion, reflecting a 6.8% growth, driven by robust performance in Institutional and Specialty businesses [5]. - The Global Healthcare and Life Sciences segment saw fixed currency sales decline by 18.2% to $334.1 million, primarily due to the surgical solutions business sale, although organic sales increased by 0.7% [6]. - The Global Pest Elimination segment's fixed currency sales improved by 9% to $308.7 million, with organic sales up 7.8% driven by growth in food & beverage and retail [7]. Margin Analysis - Ecolab's gross profit increased by 6.7% year over year to $1.74 billion, with gross margin expanding by 230 basis points to 43.4% [8]. - Adjusted operating profit rose by 17.2% to $713.1 million, with adjusted operating margin expanding by 250 basis points to 17.9% [8]. Financial Position - At the end of the third quarter, Ecolab had cash and cash equivalents of $1.26 billion, up from $384 million at the end of the second quarter [9]. - Total debt increased to $7.62 billion from $7.54 billion at the end of the second quarter [9]. - Net cash provided by operating activities was $786.7 million, slightly down from $787.7 million a year ago [10]. Guidance - Ecolab expects adjusted EPS for the fourth quarter of 2024 to be in the range of $1.75-$1.85, representing a 13-19% increase from the previous year [11]. - For the full year 2024, adjusted EPS is now expected to be in the range of $6.60-$6.70, reflecting a 27-29% increase from 2023 [12]. Overall Assessment - Ecolab's third-quarter results showed a robust year-over-year increase in both top and bottom lines, with solid performances across most segments [13]. - The company anticipates continued sales growth driven by value pricing and new business gains, alongside margin expansion [14].