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In the last reported quarter, the company’s earnings per share (EPS) of $1.34 surpassed the Zacks Consensus Estimate by 0.8%. Over the trailing four quarters, its earnings outperformed the Zacks Consensus Estimate on all occasions, delivering an earnings surprise of 1.3%, on average.
Effective in the first quarter of 2024, Ecolab has modified its segment reporting, where Global Pest Elimination is now a standalone reportable segment. This is expected to provide improved transparency on this high-growth and high-margin business.
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 first quarter of 2024. Per the company’s first-quarter earnings call in April, 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 2% in the first quarter of 2024, driven by sales growth in Downstream, Light and Heavy that overcame lower Mining sales. We are optimistic about the continued strength in Ecolab’s Water business and expect it to have significantly boosted the company’s second-quarter revenues.
However, management was not encouraged by the performance of the Paper business over the past few months, which continued to be impacted by soft industry demand. On a positive note, management is optimistic about the business’s continued volume growth as Ecolab continues to transform the business. This is likely to have a positive impact on the segmental revenues in the to-be-reported quarter.
The Zacks Consensus Estimate for the second-quarter Global Industrial segment revenues is currently pegged at $1.95 billion, indicating an uptick of 8.2% from the year-ago quarter’s reported figure.
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 first-quarter earnings call, management expects the rate of organic sales growth for Institutional Specialty to moderate somewhat because of last year's strong pricing delivery. Management alco commented that the volume in Institutional business has been solid over the past few months. The segment’s revenues in the to-be-reported quarter are expected to have benefited from these tailwinds.
Per management, the Specialty business is witnessing recovery on both the quick serve restaurants (QSR) and the food retail side. Management feels that QSR is an industry that has been doing well at all times, especially in more difficult times, because people have a tendency to trade down, and when they move from full-service restaurants to QSR, Ecolab can leverage that at a high margin. This trend is likely to have continued in the second quarter, thereby contributing to segmental revenues.
Ecolab’s to-be-reported quarter’s segmental revenues are also likely to have benefited from new business wins.
The Zacks Consensus Estimate for the second-quarter Global Institutional & Specialty segment revenues is currently pegged at $1.38 billion, implying an uptick of 9.1% from the year-ago quarter’s reported figure.
Other Factors at Work
Sustained strong demand for Pest Elimination (a component of Ecolab’s broader Other segment) in commercial businesses is likely to have driven the segment’s revenues in the to-be-reported quarter.
On the first-quarter earnings call, Ecolab announced that it has entered into a definitive agreement for the sale of its global surgical solutions business to Medline for $950 million in cash. The company is likely to provide an update on the progress of the deal during the second-quarter earnings call.
The Estimate Picture
For second-quarter 2024, the Zacks Consensus Estimate of $4.03 billion for total revenues implies an improvement of 4.7% from the prior-year quarter’s reported figure.
The consensus estimate for EPS is pegged at $1.66, implying an improvement of 33.9% 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 not the case here, as you can see below.
Earnings ESP: Ecolab has an Earnings ESP of 0.00%. 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.
The company’s shares have surged 25.3% year to date. MCK’s earnings missed estimates in the last reported quarter. McKesson has a four-quarter average earnings surprise of 8.38%.
Inari Medical (NARI - Free Report) has an Earnings ESP of +45.95% and a Zacks Rank of 3 at present.
The company’s shares have lost 15.4% year to date. NARI’s earnings missed estimates in the last reported quarter. Inari Medical has a trailing four-quarter average earnings surprise of 130.74%.
AxoGen (AXGN - Free Report) has an Earnings ESP of +25.00% and a Zacks Rank of 3 at present.
The stock has risen 33.5% year to date. AXGN’s earnings beat estimates in the last reported quarter. AxoGen has a four-quarter average earnings surprise of 66.46%.
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Factors Setting the Tone for Ecolab's (ECL) Q2 Earnings
Ecolab, Inc. (ECL - Free Report) is scheduled to report second-quarter 2024 results on Jul 30, before the opening bell.
In the last reported quarter, the company’s earnings per share (EPS) of $1.34 surpassed the Zacks Consensus Estimate by 0.8%. Over the trailing four quarters, its earnings outperformed the Zacks Consensus Estimate on all occasions, delivering an earnings surprise of 1.3%, on average.
Effective in the first quarter of 2024, Ecolab has modified its segment reporting, where Global Pest Elimination is now a standalone reportable segment. This is expected to provide improved transparency on this high-growth and high-margin business.
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 first quarter of 2024. Per the company’s first-quarter earnings call in April, 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 2% in the first quarter of 2024, driven by sales growth in Downstream, Light and Heavy that overcame lower Mining sales. We are optimistic about the continued strength in Ecolab’s Water business and expect it to have significantly boosted the company’s second-quarter revenues.
However, management was not encouraged by the performance of the Paper business over the past few months, which continued to be impacted by soft industry demand. On a positive note, management is optimistic about the business’s continued volume growth as Ecolab continues to transform the business. This is likely to have a positive impact on the segmental revenues in the to-be-reported quarter.
The Zacks Consensus Estimate for the second-quarter Global Industrial segment revenues is currently pegged at $1.95 billion, indicating an uptick of 8.2% from the year-ago quarter’s reported figure.
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 first-quarter earnings call, management expects the rate of organic sales growth for Institutional Specialty to moderate somewhat because of last year's strong pricing delivery. Management alco commented that the volume in Institutional business has been solid over the past few months. The segment’s revenues in the to-be-reported quarter are expected to have benefited from these tailwinds.
Per management, the Specialty business is witnessing recovery on both the quick serve restaurants (QSR) and the food retail side. Management feels that QSR is an industry that has been doing well at all times, especially in more difficult times, because people have a tendency to trade down, and when they move from full-service restaurants to QSR, Ecolab can leverage that at a high margin. This trend is likely to have continued in the second quarter, thereby contributing to segmental revenues.
Ecolab’s to-be-reported quarter’s segmental revenues are also likely to have benefited from new business wins.
The Zacks Consensus Estimate for the second-quarter Global Institutional & Specialty segment revenues is currently pegged at $1.38 billion, implying an uptick of 9.1% from the year-ago quarter’s reported figure.
Other Factors at Work
Sustained strong demand for Pest Elimination (a component of Ecolab’s broader Other segment) in commercial businesses is likely to have driven the segment’s revenues in the to-be-reported quarter.
On the first-quarter earnings call, Ecolab announced that it has entered into a definitive agreement for the sale of its global surgical solutions business to Medline for $950 million in cash. The company is likely to provide an update on the progress of the deal during the second-quarter earnings call.
The Estimate Picture
For second-quarter 2024, the Zacks Consensus Estimate of $4.03 billion for total revenues implies an improvement of 4.7% from the prior-year quarter’s reported figure.
The consensus estimate for EPS is pegged at $1.66, implying an improvement of 33.9% 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 not the case here, as you can see below.
Earnings ESP: Ecolab has an Earnings ESP of 0.00%. 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.
Ecolab Inc. Price and EPS Surprise
Ecolab Inc. price-eps-surprise | Ecolab Inc. Quote
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.
McKesson (MCK - Free Report) has an Earnings ESP of +0.19% and a Zacks Rank of 3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The company’s shares have surged 25.3% year to date. MCK’s earnings missed estimates in the last reported quarter. McKesson has a four-quarter average earnings surprise of 8.38%.
Inari Medical (NARI - Free Report) has an Earnings ESP of +45.95% and a Zacks Rank of 3 at present.
The company’s shares have lost 15.4% year to date. NARI’s earnings missed estimates in the last reported quarter. Inari Medical has a trailing four-quarter average earnings surprise of 130.74%.
AxoGen (AXGN - Free Report) has an Earnings ESP of +25.00% and a Zacks Rank of 3 at present.
The stock has risen 33.5% year to date. AXGN’s earnings beat estimates in the last reported quarter. AxoGen has a four-quarter average earnings surprise of 66.46%.