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Dec 31, 2019
Ecolab Q4 2019 Earnings Report
Ecolab's Q4 2019 earnings were released, showcasing an 8% increase in adjusted diluted earnings per share, driven by better pricing, new business gains, product innovation, and cost efficiencies, which offset investments and a Healthcare product recall.
Key Takeaways
Ecolab reported a 2% increase in sales and an 8% increase in adjusted diluted earnings per share for Q4 2019. The company's performance was driven by pricing, lower product costs, and cost efficiency actions, which offset investments and a Healthcare product recall. The company expects another strong earnings year in 2020, despite a challenging environment.
Reported diluted EPS increased by 9% to $1.47.
Adjusted diluted EPS grew by 8% to $1.66, excluding special gains, charges, and discrete tax items.
Acquisition adjusted fixed currency sales increased by 1%, with growth in Industrial, Institutional, and Other segments offset by a 3% decline in Energy.
Adjusted fixed currency operating margin expanded by 60 bps, driven by double-digit income growth in Industrial and Energy segments.
Revenue by Segment
Forward Guidance
Ecolab expects full year 2020 adjusted diluted earnings per share in the $6.33 to $6.53 range, rising 9% to 12% over 2019. This forecast includes an estimated unfavorable $0.05 per share impact from the effects of the coronavirus outbreak in the first quarter.
Positive Outlook
- Improving volume gains and continued pricing benefit sales.
- Improving adjusted gross margin reflecting volume gains, pricing, flattish delivered product costs and cost efficiency actions.
- Lower SG&A ratio to sales.
- A similar adjusted tax rate versus 2019.
- Strong underlying new business momentum and innovation pipeline.
Challenges Ahead
- An estimated unfavorable $0.05 per share impact from the effects of the coronavirus outbreak in the first quarter.
- Lower other income as lower interest rates result in unfavorable pension expense.
- Higher interest expense.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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