Ecolab (NYSE: ECL) reported Q1 EPS of $1.03, $0.01 better than the analyst estimate of $1.02. Revenue for the quarter came in at $3.51 billion versus the consensus estimate of $3.57 billion.

FIRST QUARTER HIGHLIGHTS:

• Reported diluted EPS $1.01, +20%.
• Adjusted diluted EPS $1.03, +13%, excluding special gains and charges and discrete tax items. Currency translation was an unfavorable $0.04 per share.
• Reported sales +1%. Acquisition adjusted fixed currency sales +3% as strong growth in the Industrial and Other segments more than offset a modest decline in Energy sales.
• Strong adjusted fixed currency operating margin expansion, +80 bps, led by double-digit Industrial, Energy and Other segment income growth.
• Sales gains, pricing, new product innovation, cost savings and a lower tax rate and interest expense more than offset higher delivered product costs, investments in the business and unfavorable foreign exchange, resulting in double-digit income growth.

CEO comment

Commenting on the quarter, Douglas M. Baker, Jr., Ecolab’s chairman and chief executive officer said, “First quarter earnings were in line with our expectations as solid fixed currency sales gains and operating margin expansion helped drive double-digit adjusted diluted earnings per share growth. Sales and earnings momentum continued to be strong in our Industrial and Other segments. Energy performed well with softer sales reflecting a tough market, but it delivered excellent margin improvement and double-digit earnings growth due to their focus on pricing and costs. Institutional was modestly softer than expected as the faster exit from low margin business and an inventory reduction by our distributors impacted the segment’s first quarter sales growth. We expect Institutional results to strengthen through the year.

“In total, the first quarter represents a very good start for us and positions us to deliver double-digit adjusted earnings per share growth in 2019 while continuing to make critical investments in the business. Our new business growth, product and service innovation, digital strategy, pricing and cost savings initiatives remain on track. We are confident in our actions and prospects for this year, as well as our capacity to continue to show superior growth and shareholder returns for the future.”

GUIDANCE:

Ecolab sees FY2019 EPS of $5.80-$6.00, versus the consensus of $5.90.

2019 adjusted diluted EPS forecast remains $5.80 to $6.00, +10% to 14%, as strong pricing, volume growth and cost efficiencies are expected to more than offset moderating delivered product cost increases and unfavorable foreign exchange impacts.

For earnings history and earnings-related data on Ecolab (ECL) click here.