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Mar 31, 2020
Ecolab Q1 2020 Earnings Report
Ecolab's first quarter results reflected solid business trends and COVID-19 impacts, with a 10% increase in adjusted diluted earnings per share.
Key Takeaways
Ecolab's first quarter reported diluted EPS was $0.97, a decrease of 4%, while adjusted diluted EPS was $1.13, a 10% increase. Reported sales increased by 2%. The company is not providing earnings forecasts due to the fluid nature of COVID-19 impacts.
Reported diluted EPS decreased by 4% to $0.97.
Adjusted diluted EPS increased by 10% to $1.13, excluding special gains and charges and discrete tax items.
Reported sales increased by 2%.
Acquisition adjusted fixed currency sales also increased by 2%, with growth in Institutional and Healthcare & Life Sciences segments offsetting a 3% decline in Upstream Energy.
Ecolab
Ecolab
Ecolab Revenue by Segment
Revenue by Segment
Institutional & Specialty Revenue
CapyFin.comPest Elimination Revenue
CapyFin.com Forward Guidance
The company expects the major COVID-19 impacts will be felt over the next few quarters and will be net unfavorable on both our top and bottom lines for the year. Our second quarter will likely see the largest sales impact as we realize both lower consumption, particularly in our restaurant and hotel segments, and channel destocking. These factors remain very fluid, and as a consequence, we are unable to reliably model our sales and therefore we will not be providing earnings forecasts.
Positive Outlook
- Expect to generate positive cash flow throughout the year.
- Company has a large cash reserve and strong balance sheet as additional backstops.
- Accelerating investments in digital connectivity and artificial intelligence capabilities.
- Accelerating investments in new hygiene technologies.
- Expect 2020 Healthcare & Life Sciences segment sales to improve over the prior year.
Challenges Ahead
- Major COVID-19 impacts will be felt over the next few quarters and will be net unfavorable on both our top and bottom lines for the year.
- Second quarter will likely see the largest sales impact as we realize both lower consumption, particularly in our restaurant and hotel segments, and channel destocking.
- Expect modest pressure on our Industrial segment businesses.
- Expect more significant pressure on sales of our Institutional and Other segments.
- Pandemic’s impact on restaurant, hospitality and entertainment to result in a significant decline for the Institutional division within the Institutional segment and Pest Elimination for the year, and more significantly in the second quarter.
Revenue & Expenses
Visualization of income flow from segment revenue to net income