The 10-second takeaway
For the quarter ended March 31 (Q1), Ecolab beat expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue increased significantly and GAAP earnings per share dropped significantly.
Margins shrank across the board.
Ecolab reported revenue of $2.81 billion. The 13 analysts polled by S&P Capital IQ predicted revenue of $2.72 billion on the same basis. GAAP reported sales were 85% higher than the prior-year quarter's $1.52 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.50. The 17 earnings estimates compiled by S&P Capital IQ anticipated $0.48 per share. GAAP EPS of $0.17 for Q1 were 58% lower than the prior-year quarter's $0.40 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 42.6%, 670 basis points worse than the prior-year quarter. Operating margin was 7.4%, 360 basis points worse than the prior-year quarter. Net margin was 1.8%, 440 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $2.98 billion. On the bottom line, the average EPS estimate is $0.73.
Next year's average estimate for revenue is $11.93 billion. The average EPS estimate is $3.03.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 259 members out of 274 rating the stock outperform, and 15 members rating it underperform. Among 80 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 79 give Ecolab a green thumbs-up, and one give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Ecolab is outperform, with an average price target of $68.20.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool owns shares of Ecolab. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.