Ecolab (ECL) to Report Q1 Earnings: What's in the Offing?
Ecolab, Inc. ECL is scheduled to report first-quarter 2021 results on Apr 27, before the opening bell. The company’s earnings were in line with estimates in the last reported quarter.
Bleak Estimate Picture
The Zacks Consensus Estimate for first-quarter revenues is pegged at $2.86 billion, suggesting a fall of 20.1% from the year-ago period’s reported number. The same for first-quarter adjusted earnings per share stands at 82 cents, indicating a decline of 27.4% from the prior-year quarter’s reported figure.
Let’s delve deeper.
Global Industrial a Boon
Although the Global Industrial segment witnessed a sales decline in the fourth quarter of 2020 due to COVID-19 induced impact,the segment thereafter saw steady operating income growth owing to effective pricing and lower costs, a trend that most likely continued in the first quarter of 2021. Moreover, growth across Food & Beverage and Paper sub-units might have contributed to the segment’s performance in the to-be-reported quarter.
In October 2020, the company attained an approval for its Peroxide Multi Surface Cleaner and Disinfectant from the U.S. Environmental Protection Agency (EPA) for use against SARS-CoV-2, the virus responsible for COVID-19. The product is the first EPA-registered disinfectant, which is proven to be effective at killing the SARS-CoV-2 virus and is also approved for use with electrostatic spray technology.
In the same month, the company launched a path-breaking product called Sink & Surface Cleaner Sanitizer to address unexpected hygiene challenges. It is the first EPA-registered concentrated no-rinse, 2-in-1 cleaner and sanitizer for food contact surfaces that can kill emerging viral pathogens in 30 seconds.
In November, Ecolab became the first company to receive a U.S. EPA product nod for disinfection of biofilms in wastewater drains with respect to its Virasept product. In the same month, the company unveiled Exelerate TUFSOIL, a breakthrough ready-to-use gel cleaner and degreaser for food and protein manufacturers.
In February 2021, Ecolab expanded its Ecolab Certified program to include six market-leading food retailers. On following these protocols, the retailers will receive the official Ecolab Science Certified seal, thereby instilling consumer confidence as they look ahead.
In March, the company launched an improved version of its Smart Water Navigator. This free online tool is equipped to help businesses understand the value of water in their operations and take necessary actions to achieve corporate water goals.
All these developments are likely to have driven the company’s Global Industrial segment in the to-be-reported quarter.
Solid prospects in the food retail segment on net new business gains are expected to get reflected in the to-be-reported results. A shift from restaurants to food retail and increasing demand for hygiene programs are consistently boosting the Food & Beverage business.
Ecolab Inc. Price and EPS Surprise
Ecolab Inc. price-eps-surprise | Ecolab Inc. Quote
Other Factors at Work
It is important to mention here that the company’s Institutional and Pest Elimination business divisions were directly impacted by the COVID-led shutdowns of travel, dining as well as entertainment facilities in the December quarter of 2020. This trend is expected to have persisted through the March quarter of 2021 as well.
Nonetheless, the Global Healthcare and Life Sciences segment is expected to have seen sales growth during the first quarter on the back of higher sales owing to the coronavirus-related demand in both the Healthcare and Life Sciences business lines.
Solid business wins, product and service innovation, investments in new hygiene and digital technologies, and successful sales and profit initiatives are likely to have contributed to Ecolab’s first-quarter performance.
Earnings Whispers
Our proven model does not predict a beat for Ecolab this earnings season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of a positive surprise but that is not the case here as you will see below.
Earnings ESP: Ecolab has an Earnings ESP of -11.04%. 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 #4 (Sell), currently.
Stocks Worth a Look
Here are some medical stocks worth considering as these have the right combination of elements to beat on earnings this reporting cycle.
Amerisource Bergen ABC has an Earnings ESP of +0.50% and a Zacks Rank of 3, currently. You can see the complete list of today’s Zacks #1 Rank stocks here.
Stryker Corporation. SYK has an Earnings ESP of +0.11% and is a Zacks #3 Ranked stock, presently.
Zimmer Biomet Holdings ZBH has an Earnings ESP of +1.92% and a Zacks Rank #3 at present.
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Ecolab Inc. (ECL) : Free Stock Analysis Report
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