Summary
Ecolab Inc. (ECL) reported a decrease in net sales and net income for the third quarter and the first nine months of 2015 compared to the same periods in 2014. The company experienced a 7% decrease in reported net sales for the third quarter and a 4% decrease for the nine-month period. This decline was partly attributed to unfavorable foreign currency translations. However, on a fixed currency basis, sales saw a modest increase of 1% for the quarter and 2% for the nine months. Net income attributable to Ecolab decreased significantly by 29% for the third quarter and 9% for the nine-month period. A notable factor impacting results was a substantial increase in 'Special (gains) and charges,' primarily driven by a $124.6 million charge related to the Venezuelan currency devaluation in the third quarter alone, and a total of $240.4 million for the nine-month period. Excluding these special charges and discrete tax items, adjusted net income and adjusted diluted EPS showed more positive trends, increasing by 4% and 6% respectively for both the quarter and the nine-month period, indicating underlying operational improvements. The Global Industrial and Global Institutional segments showed sales growth on a fixed currency basis, while the Global Energy segment experienced a decline due to lower oil prices and reduced drilling activity. The company continued to manage its debt effectively and generated strong operating cash flow, supporting its share repurchase program and dividend payments.
Financial Highlights
55 data points| Revenue | $3.45B |
| Cost of Revenue | $1.82B |
| Gross Profit | $1.63B |
| SG&A Expenses | $1.07B |
| Operating Income | $413.00M |
| Interest Expense | $61.60M |
| Net Income | $257.80M |
| EPS (Basic) | $0.87 |
| EPS (Diluted) | $0.86 |
| Shares Outstanding (Basic) | 295.20M |
| Shares Outstanding (Diluted) | 300.00M |
Key Highlights
- 1Reported net sales decreased by 7% in Q3 2015 and 4% year-to-date, impacted by foreign currency headwinds.
- 2Significant charges related to Venezuelan currency devaluation and other special items heavily impacted reported net income, which fell 29% in Q3 and 9% year-to-date.
- 3Excluding special items and discrete tax impacts, adjusted net income increased by 4% year-to-date, and adjusted diluted EPS grew by 6% for both the quarter and nine-month periods.
- 4Global Industrial and Global Institutional segments demonstrated fixed currency sales growth (7% and 5% respectively in Q3), while Global Energy segment sales declined 12% due to lower oil prices.
- 5Operating income margin improved on an adjusted fixed currency basis, reflecting cost savings and synergies.
- 6The company generated strong operating cash flow of $1,395 million for the nine months ended September 30, 2015.
- 7Ecolab continued to return capital to shareholders through a $1.0 billion share repurchase program, with $390 million remaining as of September 30, 2015.