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Can Global Industrial Unit Drive Ecolab's (ECL) Q2 Earnings?
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Ecolab Inc. (ECL - Free Report) is scheduled to report second-quarter 2019 results on Jul 30, before market opens. The company’s core Global Industrial unit is expected to have contributed significantly in the quarter.
Ecolab delivered an earnings surprise of 1% in the last reported quarter, the average of the trailing four quarters being a negative 0.1%.
Which Way Are Q2 Estimates Treading?
For the to-be-reported quarter, the Zacks Consensus Estimate for revenues is pegged at $3.78 billion, suggesting an improvement of 2.3% from a year ago. The same for earnings is at $1.41, indicating an increase of 11% from a year ago.
The Global Industrial segment has likely gained from the Water, Food & Beverage and Life Sciences sub-units. Not to forget, the segment accounted for 36.5% of net sales in the last reported quarter.
It is encouraging to note that a slew of recent developments is expected to boost the Global Industrial arm.
For instance, in recent past, the company unveiled a free online tool to help businesses globally in the process of improving water management. Such an enhancement is likely to reflect in the segment’s to-be-reported-quarter performance.
Also, the company launched a Life Sciences cleanroom program in North America, specially developed for pharmaceutical manufacturing. The program provides comprehensive cleaning and disinfection for both sterile and non-sterile applications.
Additionally, Ecolab’s subsidiary, Nalco Water, recently unveiled LegionGuard LG25, which is designed to lower the waterborne pathogen Legionella pneumophila in drinking water systems. (Read More: Ecolab's Nalco Water to Boost Public Health With New Offering)
Reflective of these, the Zacks Consensus Estimate for the segment’s second-quarter earnings is pegged at $1.4 billion, suggesting a year-over-year increase of 3.8%.
Other Factors at Work
The company’s Global Energy and Global Institutional units are expected to see a solid quarter.
The Zacks Consensus Estimate for Global Energy’s second-quarter revenues stands at $880 million, calling for a 3% year-over-year increase. The same for Global Institutional is pinned at $1.34 billion, indicating a rise of 2% from the year-ago quarter.
Ecolab’s industry-leading technologies along with excellent field service to support long-term growth for the company are expected to boost the aforementioned units. Strong international presence is another positive.
Resultantly, Ecolab expects second-quarter adjusted earnings per share (EPS) within $1.36 to $1.46, indicating a rise of 7-15% year over year. The company also projects gross margin at 42%.
However, volatile currency exchange rates are expected to have adversely impacted Ecolab in the second quarter. In fact, second-quarter adjusted EPS is likely to be impacted by 5 cents. Additionally, competition in the chemical specialty market is stiff.
What Our Quantitative Model Suggests
Our proven model clearly indicates that a stock needs to have both — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — to deliver a positive earnings surprise. However, that is not the case here.
Earnings ESP: Ecolab has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Ecolab carries a Zacks Rank #3.
Please note that we caution against stocks with a Zacks Rank #4 (Sell) or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks Worth a Look
Here are a few medical stocks worth considering as they have the right combination of elements to post an earnings beat this quarter.
DENTSPLY SIRONA (XRAY - Free Report) has an Earnings ESP of +6.95% and a Zacks Rank #1.
Acadia Healthcare Company, Inc. (ACHC - Free Report) has an Earnings ESP of +4.30% and a Zacks Rank #2.
Radical New Technology Creates $12.3 Trillion Opportunity
Imagine buying Microsoft stock in the early days of personal computers… or Motorola after it released the world’s first cell phone. These technologies changed our lives and created massive profits for investors.
Today, we’re on the brink of the next quantum leap in technology. 7 innovative companies are leading this “4th Industrial Revolution” - and early investors stand to earn the biggest profits.
Image: Bigstock
Can Global Industrial Unit Drive Ecolab's (ECL) Q2 Earnings?
Ecolab Inc. (ECL - Free Report) is scheduled to report second-quarter 2019 results on Jul 30, before market opens. The company’s core Global Industrial unit is expected to have contributed significantly in the quarter.
Ecolab delivered an earnings surprise of 1% in the last reported quarter, the average of the trailing four quarters being a negative 0.1%.
Which Way Are Q2 Estimates Treading?
For the to-be-reported quarter, the Zacks Consensus Estimate for revenues is pegged at $3.78 billion, suggesting an improvement of 2.3% from a year ago. The same for earnings is at $1.41, indicating an increase of 11% from a year ago.
Ecolab Inc. Price and EPS Surprise
Ecolab Inc. price-eps-surprise | Ecolab Inc. Quote
Let’s delve deeper.
Global Industrial Likely to Drive Q2
The Global Industrial segment has likely gained from the Water, Food & Beverage and Life Sciences sub-units. Not to forget, the segment accounted for 36.5% of net sales in the last reported quarter.
It is encouraging to note that a slew of recent developments is expected to boost the Global Industrial arm.
For instance, in recent past, the company unveiled a free online tool to help businesses globally in the process of improving water management. Such an enhancement is likely to reflect in the segment’s to-be-reported-quarter performance.
Also, the company launched a Life Sciences cleanroom program in North America, specially developed for pharmaceutical manufacturing. The program provides comprehensive cleaning and disinfection for both sterile and non-sterile applications.
Additionally, Ecolab’s subsidiary, Nalco Water, recently unveiled LegionGuard LG25, which is designed to lower the waterborne pathogen Legionella pneumophila in drinking water systems. (Read More: Ecolab's Nalco Water to Boost Public Health With New Offering)
Reflective of these, the Zacks Consensus Estimate for the segment’s second-quarter earnings is pegged at $1.4 billion, suggesting a year-over-year increase of 3.8%.
Other Factors at Work
The company’s Global Energy and Global Institutional units are expected to see a solid quarter.
The Zacks Consensus Estimate for Global Energy’s second-quarter revenues stands at $880 million, calling for a 3% year-over-year increase. The same for Global Institutional is pinned at $1.34 billion, indicating a rise of 2% from the year-ago quarter.
Ecolab’s industry-leading technologies along with excellent field service to support long-term growth for the company are expected to boost the aforementioned units. Strong international presence is another positive.
Resultantly, Ecolab expects second-quarter adjusted earnings per share (EPS) within $1.36 to $1.46, indicating a rise of 7-15% year over year. The company also projects gross margin at 42%.
However, volatile currency exchange rates are expected to have adversely impacted Ecolab in the second quarter. In fact, second-quarter adjusted EPS is likely to be impacted by 5 cents. Additionally, competition in the chemical specialty market is stiff.
What Our Quantitative Model Suggests
Our proven model clearly indicates that a stock needs to have both — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — to deliver a positive earnings surprise. However, that is not the case here.
Earnings ESP: Ecolab has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Ecolab carries a Zacks Rank #3.
Please note that we caution against stocks with a Zacks Rank #4 (Sell) or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks Worth a Look
Here are a few medical stocks worth considering as they have the right combination of elements to post an earnings beat this quarter.
AmerisourceBergen has an Earnings ESP of +0.92% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
DENTSPLY SIRONA (XRAY - Free Report) has an Earnings ESP of +6.95% and a Zacks Rank #1.
Acadia Healthcare Company, Inc. (ACHC - Free Report) has an Earnings ESP of +4.30% and a Zacks Rank #2.
Radical New Technology Creates $12.3 Trillion Opportunity
Imagine buying Microsoft stock in the early days of personal computers… or Motorola after it released the world’s first cell phone. These technologies changed our lives and created massive profits for investors.
Today, we’re on the brink of the next quantum leap in technology. 7 innovative companies are leading this “4th Industrial Revolution” - and early investors stand to earn the biggest profits.
See the 7 breakthrough stocks now>>