By Dow Jones Business News, February 26, 2013, 09:30:00 AM EDT
By Ben Fox Rubin and Saabira Chaudhuri
Ecolab Inc.'s ( ECL ) fourth-quarter earnings surged on strong revenue while benefiting from a comparison with a year-
earlier period that was bogged down by higher one-time charges.
Ecolab--a provider of cleaning, sanitation and pest-control products--unveiled a restructuring plan last year that
included job cuts and other efforts to enhance cost savings from its $5.6 billion acquisition of chemical maker Nalco
Holding Co. The addition of Nalco allowed Ecolab to expand beyond its legacy of commercial-grade detergents and
disinfectants, and contributed to higher revenue. But the related acquisition and restructuring costs have weighed on
its bottom line.
Ecolab also agreed late last year to buy chemical maker Champion Technologies for roughly $2.16 billion.
The company said Tuesday the current year will include a per-share net charge of 35 cents, primarily driven by
restructuring charges, Nalco integration costs and Champion acquisition-related costs.
Meanwhile, Chief Executive Douglas M. Baker said "fourth quarter results were strong as our team performed very well
in 2012's challenging environment, driving strong sales growth in otherwise mixed end-markets and economies."
He said fourth-quarter segment earnings also benefited from a comparison to a softer period last year for its water,
paper and energy services businesses, when profits were affected by a sharp run-up in raw material costs in that period.
For the most recent quarter, Ecolab reported a profit of $231.4 million, or 77 cents a share, versus $88.7 million, or
34 cents a share, a year earlier. The latest period included $34.7 million in one-time charges, versus $63 million the
year before. Excluding one-time items, per-share earnings were 89 cents, up from 70 cents. The company in December
forecast 87 cents to 91 cents.
Revenue jumped 65% to $3.05 billion, compared with estimates of $3.04 billion from analysts polled by Thomson Reuters.
Ecolab said excluding special gains and charges and when measured at constant currency, sales rose 5%.
Gross margin narrowed to 46% from 47.6%.
For the current quarter, the company predicted adjusted per-share earnings of 56 cents to 60 cents. Analysts polled by
Thomson Reuters recently expected 65 cents.
Shares of Ecolab, which backed its view for the year, closed Monday at $72.80 and were inactive premarket. The stock
has risen 16% over the past 12 months.
Write to Ben Fox Rubin at firstname.lastname@example.org and Saabira Chaudhuri at email@example.com
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