) is set to release its 2014-second quarter results on Jul 29,
before the opening bell. In the last quarter, the company posted a
neutral surprise. Let's see how things are shaping up for this
Growth Factors This Past Quarter
Ecolab's consistent delivery of double-digit earnings growth
despite the current challenging business environment continues to
be impressive. One can derive comfort from the company's large base
of recurring revenues and its industry-leading technologies along
with excellent field service, to support long-term growth for the
Ecolab expects cumulative cost savings from the Energy
Restructuring Plan of at least $80 million in 2014, with annual
cost savings and synergies of $150 million by the 2015-end. In the
first quarter of 2014, the Energy Restructuring Plan has achieved
roughly $15 million in savings.
Ecolab also anticipates cumulative cost savings and synergies from
the Combined Restructuring Plan of at least $325 million in 2014.
In the first quarter of 2014, the Combined Restructuring Plan has
achieved about $25 million in savings.
For the second quarter of 2014, Ecolab expects adjusted gross
margin of 46% and adjusted earnings per share of $1.00 to $1.04.
The Zacks Consensus Estimate of $1.02 lies within the guided range.
For full year 2014, Ecolab anticipates adjusted gross margin of 47%
and reiterated its higher adjusted earnings per share between $4.10
and $4.20 compared with 2013. The Zacks Consensus Estimate of $4.18
lies within the guided range.
Our proven model does not conclusively show that Ecolab is likely
to beat earnings this quarter. That is because a stock needs to
have both a positive Earnings ESP and a Zacks Rank of #1, 2 or 3
for this to happen. That is not the case here, as you will see
, the difference between the Most Accurate Estimate of $1.02 and
the Zacks Consensus Estimate of $1.02, stands at nil.
Zacks Rank #3 (Hold):
The combination of Ecolab's Zacks Rank #3 (Hold) and no ESP makes
surprise prediction difficult. We caution against stocks with Zacks
#4 and #5 Ranks (Sell-rated stocks) going into the earnings
announcement, especially when the company is seeing negative
estimate revisions momentum.
Other Stocks to Consider
Here are some other companies you may want to consider as our model
shows they have the right combination of elements to post an
earnings beat this quarter:
Sirona Dental Systems Inc. (
), Earnings ESP of 1.04% and a Zacks Rank #2 (Buy).
Hospira Inc. (
), Earnings ESP of 1.79% and a Zacks Rank #2 (Buy).
Wright Medical Group Inc. (
), Earnings ESP of 8.89% and a Zacks Rank #2 (Buy).
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ECOLAB INC (ECL): Free Stock Analysis Report
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WRIGHT MEDICAL (WMGI): Free Stock Analysis
SIRONA DENTAL (SIRO): Free Stock Analysis
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