Ecolab (ECL) Guides FY13 Below Street

January 8, 2013 8:36 AM EST
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Ecolab Inc. announced today that it looks for strong sales and earnings growth to continue in 2013.

Douglas M. Baker, Jr., Ecolab’s Chairman and Chief Executive Officer, said, “We expect another strong year in 2013. In spite of expected continued soft economic and market trends in 2013, as well as unfavorable pension expense due to lower interest rates, we plan on again driving growth using new product introductions, superior sales and service execution, new account wins, and better customer penetration. We will also continue to focus on cost reductions, improved operating efficiency, and merger synergies to leverage top line gains and yield margin improvement.

“With our business focused on helping our customers deliver on fundamental global needs including clean water, safe food, abundant energy and healthy environments, we believe we are very well-positioned to deliver steady, above-average growth for 2013 and beyond. We have made and will continue to make the right investments in our business to further build our product and service capabilities as well as our business base so that we can better service our customers, and as a result of these, generate superior returns for our shareholders. We remain excited by our opportunities and by our terrific team.”

Ecolab expects 2013 adjusted diluted earnings per share, excluding special gains and charges and discrete tax items, to be in a $3.38 to $3.48 range, including the approximately $0.03 per share dilutive impact of the previously announced Vehicle Care Division sale and excluding the accretive impact of the pending Champion acquisition. As previously announced, the Champion transaction closing remains subject to clearance by the U.S. Department of Justice under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and certain other closing conditions. Ecolab previously expected the Champion acquisition to close by year end 2012 and to be accretive to 2013 earnings by approximately $0.12 per share. As previously disclosed, Ecolab remains confident the transaction will close in early 2013; however, it remains possible that the transaction will not be completed in such a time frame or at all. A delayed closing is not expected to impact the full run-rate accretion of $0.50 per share by 2016. However, 2013 expected accretion will be lower than previously forecast and an updated accretion estimate will be provided when the closing date is determined.

Consistent with its previous forecast, Ecolab expects to deliver full year 2012 adjusted diluted earnings per share in the $2.96 to $3.00 range despite the delayed passage of the 2012 R&D tax credit in early January 2013. As Ecolab previously announced, the credit was expected to benefit the fourth quarter of 2012 by $0.01 per share. Due to the delayed approval by Congress, the $0.01 per share R&D tax credit benefit will now be recorded as a discrete tax item in the first quarter of 2013 and not included in our 2012 results. Special gains and charges for the full year 2012 are expected to be a net charge of approximately $0.60 per share.

Ecolab's adjusted diluted earnings per share were $2.54 in 2011. Ecolab expects to announce final 2012 results February 26, 2013.

(Street sees 2012 EPS of $2.98)
(Street sees 2013 EPS of $3.64)

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