The 10-second takeaway
For the quarter ended Sep. 30 (Q3), Ecolab met expectations on revenues and met expectations on earnings per share.
Compared to the prior-year quarter, revenue grew significantly and GAAP earnings per share grew significantly.
Margins shrank across the board.
Ecolab reported revenue of $3.02 billion. The 14 analysts polled by S&P Capital IQ anticipated revenue of $3.07 billion on the same basis. GAAP reported sales were 74% higher than the prior-year quarter's $1.74 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 $0.87. The 17 earnings estimates compiled by S&P Capital IQ averaged $0.87 per share. GAAP EPS of $0.80 for Q3 were 23% higher than the prior-year quarter's $0.65 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 46.5%, 320 basis points worse than the prior-year quarter. Operating margin was 14.2%, 120 basis points worse than the prior-year quarter. Net margin was 7.9%, 100 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $3.06 billion. On the bottom line, the average EPS estimate is $0.90.
Next year's average estimate for revenue is $11.90 billion. The average EPS estimate is $2.99.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 265 members out of 279 rating the stock outperform, and 14 members rating it underperform. Among 90 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 88 give Ecolab a green thumbs-up, and two 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 $71.33.
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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.
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