Ecolab's strong third quarter boosts end-of-year confidence

Continuing its momentum from earlier this year, Ecolab reported stronger than expected third-quarter earnings and is looking confidently at the remainder of the year and into 2024.

While many economists and other CEOs remain concerned about persistently high inflation and interest rates and thus are projecting a weaker economic environment, Ecolab leaders said the company is only gaining momentum.

"We all have to be cautious. We all have to be realistic. What gives me confidence is what we can control," said Christophe Beck, Ecolab's chair and chief executive. "Our new business is at record highs. Because what we do for customers is more needed than ever, which is water preservation, energy savings, product quality improvement and product safety protection as well."

The St. Paul-based provider of water, hygiene and infection prevention solutions and services earned $404 million, or $1.41 a share, in the third quarter, on revenue that increased 8% to $3.9 billion. In the third quarter of last year, Ecolab earned $347.1 million, or $1.21 a share.

Ecolab's adjusted earnings per share (EPS) increased 18% to $1.54 a share, at the top end of Ecolab's previously issued guidance range and better than the $1.52 a share analysts estimated for the third quarter.

"Ecolab continued to deliver very strong sales and earnings growth despite unpredictable macro conditions," Beck said in a news release.

Ecolab said it expects adjusted EPS in the fourth quarter to be in the range of $1.48 to $1.58, which would represent growth of 17% to 24% vs. the fourth quarter of 2022.

"Ecolab's long-term fundamentals are stronger than ever, and we remain confident in our outlook. We expect strong growth in adjusted earnings in the fourth quarter, with this momentum continuing into 2024 as we work to deliver superior shareholder returns," Beck said in the release.

Ecolab shares closed at $167.68, up 5.4%, on Tuesday.