Ecolab Reports 17% First Quarter EPS Increase to $0.35
biz.yahoo.com
Tuesday April 24, 8:36 am ET
2007 full year outlook raised; now projects 14%-16% EPS growth to $1.63-$1.66
ST. PAUL, Minn.--(BUSINESS WIRE)--Ecolab Inc. (NYSE:ECL):
2007 FIRST QUARTER HIGHLIGHTS:
* Record diluted net income per share, +17% to $0.35
* Record sales, +12% to $1.3 billion
* Double-digit U.S., Canada and Latin America sales propel growth
* U.S. led by double-digit gains from Institutional, Kay, Pest Elimination, Vehicle Care, Textile Care, Healthcare
First Quarter Ended March 31
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(unaudited)
(Millions, except per share) 2007 2006 % Increase
--------- ----------- ----------
Net Sales $1,254.2 $1,120.1 12%
Operating Income 148.4 131.4 13%
Pretax Income 136.7 121.1 13%
Taxes 47.2 43.2 9%
--------- ----------- ----------
Net Income $89.5 $77.9 15%
========= =========== ==========
Diluted Net Income Per Common Share $0.35 $0.30 17%
Diluted Average Shares Outstanding 254.5 258.1 -1%
Double-digit growth from its U.S., Canada and Latin America operations led Ecolab's first quarter results to record levels for the period ended March 31, 2007.
Ecolab's consolidated sales increased 12% to a record $1.3 billion in the first quarter of 2007; measured in fixed currencies, sales rose 9%. Net income increased 15% to a record $90 million. Diluted earnings per share were up 17% to a record $0.35.
Commenting on the quarter, Douglas M. Baker, Jr., Ecolab's Chairman, President and Chief Executive Officer said, "We are off to a strong start to the year, with outstanding performances from our businesses in nearly all regions. This has enabled us to deliver strong results, solidify our confidence in the year and accelerate investments in key long term growth opportunities.
"We think 2007 will be another terrific year for Ecolab. We expect to do it the same way we always have - by delivering superior growth today while investing for superior growth for the future, leveraging our strong performers to develop areas of strategic focus, and building strong management teams. To that end, our new team in Europe, put in place last fall, is undertaking important initiatives and investments that will help us develop stronger and sustainable profit growth in that region. We are confident in our strategy and actions, and in the strength of our global operations and outlook. We have raised our 2007 earnings forecast, and remain excited about our business, opportunities, and abilities to deliver on them."
First quarter 2007 sales for Ecolab's United States Cleaning & Sanitizing operations rose 11% to $568 million, led by double-digit gains by Institutional, Kay, Healthcare, Textile Care and Vehicle Care and continued good growth from Food & Beverage. Ecolab's United States Cleaning & Sanitizing operating income rose 25% to $99 million.
United States Other Services sales increased 10% to $102 million in the first quarter benefiting from continued double-digit gains by Pest Elimination and a good sales increase by GCS. Operating income increased 16% to $9 million.
Sales of Ecolab's International operations, when measured at fixed currency rates, rose 7% to $573 million in the first quarter. Latin America and Canada reported double-digit sales increases and Asia Pacific showed strong gains. Europe/Middle East/Africa (EMEA) recorded moderate sales growth. Fixed currency operating income declined 13% to $39 million reflecting higher delivered product costs not fully offset by pricing actions, particularly in Europe; growth and efficiency investments; and comparison against a strong quarter last year. When measured at public currency rates, International sales increased 14% and operating income declined 9%. Currency translation had a favorable impact on net income growth of approximately $1 million for the first quarter of 2007.
Ecolab reacquired 4.3 million shares of its common stock during the first quarter.
Business Outlook
Ecolab expects sales for both domestic and international operations (in fixed currencies) to increase in the second quarter 2007 over the second quarter 2006. Gross margins are expected to approximate 51% and compare favorably with 50.4% last year. Selling, general and administrative expenses as a ratio to sales are expected to rise slightly above the 37.9% recorded a year ago. Interest expense is expected to be $13 million to $14 million. The effective tax rate in the quarter is expected to be in a 34%-35% range. Overall, currency translation is expected to benefit second quarter earnings. Diluted earnings per share are expected to be in the $0.40-$0.41 range in the second quarter of 2007. Diluted earnings per share were $0.36 for the second quarter of 2006. For the full year ending December 31, 2007, Ecolab now expects diluted earnings per share in the $1.63-$1.66 range. |
