Ecolab Inc (NYSE:ECL) stock fell 1.90% (As on February 14, 11:40:28 AM UTC-4, Source: Google Finance) after the company posted mixed results for the fourth quarter of FY 23. The Industrial segment reported a 3% increase in organic sales, with Water and Food & Beverage divisions driving growth despite a decline in Paper sales due to soft industry demand. The Institutional & Specialty segment saw a 12% rise in organic sales, with both divisions achieving double-digit growth. However, the Healthcare & Life Sciences segment experienced a 1% decrease in organic sales, with stable performance in Healthcare offset by a decline in Life Sciences.
ECL in the fourth quarter of FY 23 has reported the adjusted earnings per share of $1.55, beating the analysts’ estimates for the adjusted earnings per share of $1.54, according to Zacks Investment Research. The company had reported the adjusted revenue growth of 7 percent to $3.94 billion in the fourth quarter of FY 23, missing the analysts’ estimates for revenue of $3.96 billion. This growth was supported by a 6% rise in organic sales, indicating strong underlying business performance. Operating income surged, with reported figures showing a 48% increase and adjusted figures revealing a 24% rise. Net income attributable to Ecolab soared by 53% on a reported basis and 22% on an adjusted basis.
For the current quarter ending in March, Ecolab expects its per-share earnings to range from $1.27 to $1.37.
The company expects full-year earnings to be in the range of $6.10 to $6.50 per share. This forecast assumes soft but stable macroeconomic demand and lower delivered product costs in the first half of the year as global inflation eases. Higher interest expense, pension expense and foreign currency translation are estimated to have a combined $0.05 per share unfavorable impact in 2024.
Against this backdrop, Ecolab expects sales growth, driven by new business gains and continued value-based pricing, SG&A productivity through the year, and attractive operating income margin expansion. This strong performance is expected to result in quarterly adjusted diluted earnings per share growth that progressively normalizes towards the upper-end of Ecolab’s long-term 12-15% target as favorability from lower delivered product costs is only assumed in the first half of the year. The company currently expects quantifiable special charges in 2024 to be approximately $0.10 to $0.15 per share, principally related to restructuring charges.