Free Annual Reports
Ecolab's Second Quarter Earnings Report
Tickers in this Article »
ECL
Ecolab (NYSE:ECL) announced its results for the second quarter on July 31, 2012. Ecolab develops and markets cleaning and sanitizing products and programs, pest elimination, maintenance, and repair services for the hospitality, foodservice, healthcare and industrial markets.
Earnings are perhaps the single most studied number in a company's financial statements because they show a company's profitability. SEE: How To Decode A Company's Earnings Reports
The Numbers: Ecolab's EPS fell in line with analyst expectations of 72 cents per share while quarterly revenue of $2.96 billion topped estimates of $2.72 billion. Revenue climbed 74.2% from the same period last year. Ecolab has averaged revenue growth of 39.9% over the past five quarters. The company's net income for the quarter was $184.5 million. According to the reported number, this is up 46.5% from last year's figures. After posting a profit last quarter, the company breaks a streak of four consecutive quarters of year-over-year profit drops.
Management Quote: Commenting on the quarter, Douglas M. Baker, Jr., Ecolab's Chairman and Chief Executive Officer said, "We continued to perform well in the second quarter as our balanced businesses showed good gains against mixed global economies, benefiting from new account gains and teamwork among our combined sales forces. We also continued to make excellent progress delivering on our integration and synergy objectives. "We expect to deliver a strong year. While we face increasing headwinds from slowing economic activity and unfavorable currencies, we continue to work aggressively to drive superior sales growth and margin expansion as we benefit from our strengthened product portfolio and our strong focus on execution.
A Look Back: Last quarter was the fifth in a row that the company saw shrinking gross margins, as they fell 3.7 percentage points from the year-earlier quarter to 45.6%. In that span, margins have contracted an average of 3.2 percentage points per quarter on a year-over-year basis.
Net income has dropped 9.4% year-over-year on average across the last five quarters. Performance was hurt by a 46.9% decline in the first quarter from the year-earlier quarter.
Looking Ahead: When earnings estimates stay consistent leading up to earnings season, this usually shows analysts accurately predicted earnings estimates and business is stable. Be cautious though as this may also be a warnings sign that earnings could come at a huge surprise to the upside or downside as analyst did not correctly predict earnings. Steady earnings estimates mean there is not enough change going on with the company to make analysts change their opinions. When earning estimates are steady, investors can look at the revenue trend for a more fundamental indicator. The average estimate for the fiscal year is $3.01 per share, down from $3.02 90 days ago.
Earnings are perhaps the single most studied number in a company's financial statements because they show a company's profitability. SEE: How To Decode A Company's Earnings Reports
The Numbers: Ecolab's EPS fell in line with analyst expectations of 72 cents per share while quarterly revenue of $2.96 billion topped estimates of $2.72 billion. Revenue climbed 74.2% from the same period last year. Ecolab has averaged revenue growth of 39.9% over the past five quarters. The company's net income for the quarter was $184.5 million. According to the reported number, this is up 46.5% from last year's figures. After posting a profit last quarter, the company breaks a streak of four consecutive quarters of year-over-year profit drops.
Management Quote: Commenting on the quarter, Douglas M. Baker, Jr., Ecolab's Chairman and Chief Executive Officer said, "We continued to perform well in the second quarter as our balanced businesses showed good gains against mixed global economies, benefiting from new account gains and teamwork among our combined sales forces. We also continued to make excellent progress delivering on our integration and synergy objectives. "We expect to deliver a strong year. While we face increasing headwinds from slowing economic activity and unfavorable currencies, we continue to work aggressively to drive superior sales growth and margin expansion as we benefit from our strengthened product portfolio and our strong focus on execution.
A Look Back: Last quarter was the fifth in a row that the company saw shrinking gross margins, as they fell 3.7 percentage points from the year-earlier quarter to 45.6%. In that span, margins have contracted an average of 3.2 percentage points per quarter on a year-over-year basis.
Net income has dropped 9.4% year-over-year on average across the last five quarters. Performance was hurt by a 46.9% decline in the first quarter from the year-earlier quarter.
Looking Ahead: When earnings estimates stay consistent leading up to earnings season, this usually shows analysts accurately predicted earnings estimates and business is stable. Be cautious though as this may also be a warnings sign that earnings could come at a huge surprise to the upside or downside as analyst did not correctly predict earnings. Steady earnings estimates mean there is not enough change going on with the company to make analysts change their opinions. When earning estimates are steady, investors can look at the revenue trend for a more fundamental indicator. The average estimate for the fiscal year is $3.01 per share, down from $3.02 90 days ago.
by
Investopedia Staff
Investopedia.com believes that individuals can excel at managing their financial affairs. As such, we strive to provide free educational content and tools to empower individual investors, including thousands of original and objective articles and tutorials on a wide variety of financial topics.
Free Annual Reports
