Ecolab (ECL) to Report Q1 Earnings: What's in the Offing?
Ecolab, Inc. ECL is scheduled to report first-quarter 2022 results on Apr 26, before the opening bell.
In the last-reported quarter, the company’s earnings of $1.28 per share surpassed the Zacks Consensus Estimate by 0.8%. Over the trailing four quarters, its earnings outperformed the Zacks Consensus Estimate on three occasions and missed the same in one, delivering an earnings surprise of 2.5%, on average.
Let’s see how things have shaped up for Ecolab prior to this announcement:
Global Industrial
The Global Industrial segment witnessed a sales uptick in the fourth quarter of 2021 on the back of substantial product sales growth. Water, Paper and Downstream had recorded solid growth in the last-reported quarter, led by new business wins and accelerated pricing. Food & Beverage had also registered good gains in the fourth quarter. This momentum is likely to have continued in the first quarter as well.
Per the fourth-quarter quarter earnings call in February, Ecolab had confirmed that its Water business was continuing to register strong momentum. Rising water scarcity issues, the need for net zero carbon and water, and management’s beliefs that it can face less issues concerning water and reduce its carbon footprint at the same time at high margin, is likely to keep the momentum going. This is likely to have considerably driven the first-quarter 2022 top line.
Notable offerings from the company include the Peroxide Multi Surface Cleaner, Disinfectant for use against SARS-CoV-2, Sink & Surface Cleaner Sanitizer, Exelerate TUFSOIL and the Water Flow Intelligence, which are likely to have registered continued customer adoption in the first quarter, thereby pushing up revenues.
Global Institutional & Specialty
Ecolab’s Institutional & Specialty segment recorded strong growth in the last-reported quarter owing to strong growth in quick service restaurant (“QSR”). The recovery in QSR is expected to have continued in the first quarter, thereby contributing to the segment’s revenues.
Ecolab's recent programs, including Ecolab Science Certified and Net Zero, are expected to provide its Industrial segment’s customers with improved ways to deliver on their commitments. In its fourth-quarter earnings release, the company had confirmed that it was experiencing significant progress via Net Zero. These trends are likely to have continued in the to-be-reported quarter as well, thus driving up revenues.
Other Factors at Work
Rising demand for Pest Elimination (a component of Ecolab’s broader Other segment) in food and beverage plants to avoid food safety issues are likely to have driven the segment’s revenues in the to-be-reported quarter.
The Global Healthcare and Life Sciences segment is likely to have witnessed sustained underlying sales growth in the first quarter, attributable to new business wins and increased hygiene awareness. This momentum, along with accelerating pricing and structured productivity resulting from Ecolab’s digital automation, is also likely to have contributed robustly to this business’ revenues.
However, management’s expectations of inflation remaining at a high level, at least for the first half of the year, raises apprehensions about the stock.
The Estimate Picture
For first-quarter 2022, the Zacks Consensus Estimate of $3.21 billion for total revenues implies an improvement of 11.2% from the prior-year quarter’s reported figure.
The consensus estimate for earnings per share is pegged at 82 cents, implying an uptick of 1.2% 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. However, this is not the case here as you can see:
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.
Stocks Worth a Look
Here are a few medical stocks worth considering, as these have the right combination of elements to beat on earnings this reporting cycle:
Meridian Bioscience, Inc. VIVO has an Earnings ESP of +26.32% and a Zacks Rank of 2. VIVO has an earnings yield of 5% compared with the industry’s 0.4%.
Meridian Bioscience’s earnings surpassed estimates in three of the trailing four quarters, with the average surprise being 9.3%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Lucira Health, Inc. LHDX has an Earnings ESP of +485.72% and is a Zacks #2 Ranked stock. LHDX has an estimated long-term growth rate of 40.2%.
Lucira Health’s earnings surpassed estimates in two of the trailing four quarters, with the average surprise being 8%.
Avanos Medical, Inc. AVNS has an Earnings ESP of +4.17% and a Zacks Rank of 1 at present. AVNS has an earnings yield of 5.1% against the industry’s negative yield.
Avanos’ earnings surpassed estimates in two of the trailing four quarters, with the average surprise being 6.7%.
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Meridian Bioscience Inc. (VIVO) : Free Stock Analysis Report
Ecolab Inc. (ECL) : Free Stock Analysis Report
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Lucira Health, Inc. (LHDX) : Free Stock Analysis Report
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