Ecolab (ECL) to Report Q2 Earnings: What's in the Offing?
Ecolab, Inc. ECL is scheduled to report second-quarter 2021 results on Jul 27, before the opening bell.
In the last-reported quarter, the company’s earnings of 81 cents per share lagged the Zacks Consensus Estimate by 1.2%. Over the trailing four quarters, its earnings outperformed the Zacks Consensus Estimate on one occasion, missed the same in two and broke-even in the other one, delivering a negative earnings surprise of 4.35%, on average.
Let’s see how things have shaped up prior to this announcement.
Global Industrial
The Global Industrial segment witnessed a sales decline in the first quarter of 2021 due to the impact from the Texas freeze. However, thereafter, the segment delivered improved underlying growth trends compared with the sequentially last-reported quarter, and continued to further strengthen its margin. The momentum is likely to have continued in the to-be-reported quarter as well, thus driving up revenues.
Robust adoption of the company’s Peroxide Multi Surface Cleaner and Disinfectant for use against SARS-CoV-2 and Sink & Surface Cleaner Sanitizer to address unexpected hygiene challenges are also expected to have contributed robustly to segmental revenues in the quarter.
Another notable offering from the company includes the Exelerate TUFSOIL (a breakthrough ready-to-use gel cleaner and degreaser for food and protein manufacturers), which is likely to have registered continued customer adoption, thus pushing up second-quarter revenues.
Ecolab Inc. Price and EPS Surprise
Ecolab Inc. price-eps-surprise | Ecolab Inc. Quote
The Water Flow Intelligence, a digital service that provides the industry with real-time visibility of water usage at the enterprise, site and asset levels, is another notable contributor to segmental revenues. The product, launched in May, is expected to have witnessed strong adoption, thus pushing up second-quarter revenues.
Solid prospects in the food retail segment on net new business gains are expected to get reflected in the to-be-reported quarterly results. A shift from restaurants to food retail and increasing demand for hygiene programs are consistently boosting the Food & Beverage business.
Other Factors at Work
Ecolab, in May, launched a device developed to identify the arrival of cockroaches early and provide ongoing protection, known as the Cockroach Multi-Station. The device was launched with the aim of enabling foodservice providers to ensure hygienic and safe operations. This is likely to have driven the company’s global Pest Elimination (a component of Ecolab’s broader Other segment) revenues in the to-be-reported quarter.
The Global Healthcare and Life Sciences segment is expected to have seen sales growth during the second quarter on the back of higher sales owing to the coronavirus-related demand in both the Healthcare and Life Sciences business lines, as well as benefits from new business. Also, the company’s new virtual visit offering for the life sciences industry, launched in June, to proactively help address cleaning and disinfection challenges, is also likely to have contributed robustly to its segmental revenues.
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 second-quarter performance.
The Estimate Picture
For second-quarter 2021, the Zacks Consensus Estimate of $3.09 billion for total revenues implies an improvement of 15.1% from the prior-year quarter’s reported figure.
The consensus estimate for earnings per share is pegged at $1.18, implying an uptick of 81.5% 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 -15.49%. You can uncover the best stocks to buy or sell before they’re 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.
Catalent, Inc. CTLT has an Earnings ESP of +4.61% and a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Henry Schein, Inc. HSIC has an Earnings ESP of +0.91% and a Zacks Rank of 2, at present.
Illumina, Inc. ILMN has an Earnings ESP of +2.36% and is a Zacks #2 Ranked stock.
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Ecolab Inc. (ECL) : Free Stock Analysis Report
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