Ecolab, Inc. ECL is scheduled to report third-quarter 2024 results on Oct. 29, 2024, before the opening bell.
In the last reported quarter, the company’s earnings per share (EPS) of $1.68 surpassed the Zacks Consensus Estimate by 1.2%. Over the trailing four quarters, its earnings outperformed the Zacks Consensus Estimate on all occasions, delivering an earnings surprise of 0.98%, on average.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Let’s see how things have shaped up for Ecolab prior to this announcement.
Global Industrial
The Global Industrial segment, comprising the Water, Food & Beverage, Paper and Downstream units, witnessed a sales uptick in the second quarter of 2024. Per the company’s second-quarter earnings call in July, the Global Industrial segment has made good underlying progress in improving its volume trajectory in a volatile global environment. Per management, Water organic sales increased 4% in the second quarter of 2024, driven by strong growth in downstream and light water, where global high-tech continues to grow in double-digits. We are optimistic about the continued strength in Ecolab’s Water business and expect it to have significantly boosted the company’s third-quarter revenues.
Per management, second-quarter sales in food and beverage seemed stable as good new business wins offset comparisons to last year's double-digit growth. Performance in paper also improved in the second quarter. This is likely to have continued in the to-be-reported quarter as well.
The Zacks Consensus Estimate for the third-quarter Global Industrial segment revenues is currently pegged at $1.99 billion, indicating an uptick of 8.5% from the year-ago quarter’s reported figure.
Ecolab Inc. Price and EPS Surprise
Ecolab Inc. Price and EPS Surprise
Ecolab Inc. price-eps-surprise | Ecolab Inc. Quote
Global Institutional & Specialty
Ecolab’s Global Institutional & Specialty segment recorded strong growth in the last reported quarter, courtesy of the company’s performance in the Institutional and Specialty divisions. Per the second-quarter earnings call, management commented on the Institutional and Specialty business’ strong performance and margin expansion. The segment delivered strong organic sales growth on top of last year's double-digit gains. The business also continued to significantly outperform softer restaurant food traffic trends. This trend is likely to have continued in the to-be-reported quarter as well.
Per management, the main driver of robust performance in the Institutional and Specialty segment is that the company is helping its customers with labor automation. Ecolab’s chemical solutions, machine programs and digital technologies are helping its restaurant and hotel customers serve more guests in a better way while using less labor.
Ecolab’s segmental revenues for the to-be-reported quarter are also likely to have benefited from new business wins.
The Zacks Consensus Estimate for the third-quarter Global Institutional & Specialty segment revenues is currently pegged at $1.39 billion, implying an uptick of 5.8% from the year-ago quarter’s reported figure.
Other Factors at Work
In the second-quarter Pest Elimination’s organic sales (a component of Ecolab’s broader Other segment) witnessed growth of 9%. Sustained strong demand for Pest Elimination in commercial businesses is likely to have driven the segment’s revenues in the to-be-reported quarter as well.
In August, Ecolab completed the sale of its global surgical solutions business to Medline for $950 million in cash. Per Ecolab, the completion of this sale marks a strategic shift for the company, enabling it to focus on its core competencies in infection prevention and instrument reprocessing.
The proceeds from the transaction are likely to have bolstered Ecolab's balance sheet, enhancing its ability to invest in attractive growth opportunities and return capital to shareholders. Ecolab intends to repurchase up to an additional $500 million of its stock in the second half of 2024.
The Estimate Picture
For third-quarter 2024, the Zacks Consensus Estimate of $4.02 billion for total revenues implies an improvement of 1.7% from the prior-year quarter’s reported figure.
The consensus estimate for EPS is pegged at $1.82, implying an improvement of 18.2% from the prior-year period’s reported number.
What Our Model Suggests
Per our proven model, a stock with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), along with a positive Earnings ESP, has higher chances of beating estimates. This is exactly the case here, as you can see below.
Earnings ESP: Ecolab has an Earnings ESP of +2.99%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #3.
Stocks Worth a Look
Here are some medical stocks worth considering as these have the right combination of elements to post earnings beat this reporting cycle.
Masimo MASI has an Earnings ESP of +0.40% and a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The company is likely to release third-quarter 2024 results on Nov. 5. Its earnings surpassed estimates in each of the trailing four quarters, the average surprise being 14.63%. The Zacks Consensus Estimate for EPS is expected to improve 33.3% from the year-ago reported figure.
ACADIA Pharmaceuticals ACAD has an Earnings ESP of +38.39% and a Zacks Rank #3 at present. The company is expected to release third-quarter 2024 results on Nov. 6.
ACAD’s earnings surpassed estimates in three of the trailing four quarters and missed once, the average surprise being 42.37%. The Zacks Consensus Estimate for EPS is expected to surge 127.5% from the year-ago quarter’s figure.
Biogen BIIB has an Earnings ESP of +1.97% and a Zacks Rank of 3 at present.
BIIB’s earnings surpassed estimates in three of the trailing four quarters and missed once, the average surprise being 10.25%.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
