DOW JONES NEWSWIRES
Ecolab Inc.'S (ECL) fourth-quarter net income declined 29% amid
a $19 million investment write-down and falling margins as the
company also projected first-quarter results below
expectations.
Shares slid 8% in early trading to $31.44; the stock is down
more than one-third since late September.
Ecolab, which reiterated its 2009 view, sees projected "modest"
first-quarter sales growth excluding impacts from the stronger
dollar and earnings excluding items of 30 cents to 34 cents a
share. Analysts surveyed by Thomson Reuters projected earnings of
41 cents and a 1% rise in unadjusted revenue to $1.45 billion. The
stronger dollar has been resulting in lower top-line results the
past several quarters for companies.
Deterioration in the global economy has pinched profits for
companies that provide cleaning products and services. In response,
companies in the sector continue to trim jobs and tweak product
lines amid the downturn.
Ecolab posted fourth-quarter net income of $80 million, or 33
cents a share, compared with $113.4 million, or 45 cents a share a
year earlier. Excluding items including the investment write-down,
earnings rose to 45 cents from 40 cents, in line with company's
October forecast.
Revenue increased 3% to $1.48 billion. Measured in fixed
currencies, sales rose 7%. Analysts polled by Thomson Reuters were
recently looking for $1.51 billion.
Gross margins fell to 48.1% from 50.2% amid cost increases.
Revenue for Ecolab's core business, the cleaning and sanitizing
unit, was up 10% in the U.S., with almost half of that due to
acquisitions. Other domestic revenue edged down 1% as
pest-elimination revenue slowed. International revenue increased 6%
on a fixed-currency basis, helped by double-digit gains in Latin
America.
-By Shirleen Dorman, Dow Jones Newswires; 201-938-2310;
shirleen.dorman@dowjones.com