Ecolab Inc. ECL reported fourth-quarter 2024 adjusted earnings per share (EPS) of $1.81, up 16.8% year over year. The bottom line exceeded the Zacks Consensus Estimate by 1.1%.

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GAAP EPS for the quarter was $1.66, up 17.7% year over year.

Full-year 2024 adjusted EPS was $6.65, up 27.6% from the comparable 2023 period. The metric surpassed the Zacks Consensus Estimate by a penny.

ECL’s Revenue Details

Revenues grossed $4.01 billion in the reported quarter, up 1.7% year over year. The metric topped the Zacks Consensus Estimate by 0.8%.

Ecolab’s organic sales were $4.02 billion, up 4.1% from the prior-year period’s level.

The year-over-year uptick in the fourth-quarter organic sales was driven by accelerated growth in the Industrial and Healthcare & Life Sciences segments and continued strong growth in the Pest Elimination and Institutional & Specialty segments.

Full-year 2024 revenues were $15.74 billion, reflecting a 2.7% increase from the comparable 2023 period. The metric lagged the Zacks Consensus Estimate by 0.1%.

Shares of this company gained nearly 4.7% in today’s pre-market trading.

Ecolab’s Segmental Analysis

The Global Industrial segment’s fixed currency sales of $2.07 billion reflect 4.1% reported growth year over year. Organic sales were $2.04 billion, up 2.9% year over year, as growth improved across Water, Food & Beverage, and Paper. Water’s improved growth was led by continued strong growth in downstream and light water. Improved Food & Beverage sales reflected good new business wins, which benefited from ECL’s One Ecolab enterprise selling approach.

The Global Institutional & Specialty arm’s fixed currency sales and organic sales were $1.37 billion each, reflecting growth of 5.5% year over year both on a reported and organic basis.

The Global Healthcare & Life Sciences arm’s fixed currency sales of $322.1 million declined 22.9% year over year on a reported basis. However, organic sales were also $322.1 million, up 3.5% year over year. Per management, year-over-year organic sales reflected accelerated growth in Life Sciences and modest growth in Healthcare sales. Improved growth in Life Sciences was driven by good new business wins and progressively improving industry trends. Healthcare’s modest sales growth reflected improved pricing that was offset by non-strategic low-margin business exits as ECL continues to execute Healthcare’s business transformation.

The Global Pest Elimination segment’s fixed currency sales of $295.2 million improved 8.2% year over year on a reported basis. Organic sales were $290.7 million, up 6.6% year over year.

ECL’s Margin Analysis

In the quarter under review, Ecolab’s gross profit improved 4.9% year over year to $1.74 billion. The gross margin expanded 135 basis points (bps) to 43.3%.

Selling, general and administrative expenses rose 1.5% to $1.05 billion year over year.

Adjusted operating profit totaled $686.1 million, increasing 10.8% from the prior-year quarter’s level. Adjusted operating margin in the quarter also expanded 141 bps to 17.1%.

Ecolab’s Financial Position

Ecolab exited 2024 with cash and cash equivalents of $1.26 billion compared with $919.5 million at the end of 2023. Total debt at the end of 2024 was $7.56 billion compared with $8.18 billion at 2023-end.

Cumulative net cash provided by operating activities at the end of 2024 was $2.81 billion compared with $2.41 million a year ago.

Meanwhile, Ecolab has a consistent dividend-paying history, with a five-year annualized dividend growth of 5.67%.

ECL’s Guidance

Ecolab has provided its adjusted EPS outlook for the first quarter of 2025 and initiated its outlook for the full year.

The company expects its adjusted EPS for the first quarter in the range of $1.47-$1.53, up 10-14% from the year-ago period. The Zacks Consensus Estimate is currently pegged at $1.49.

For 2025, Ecolab expects its adjusted EPS in the range of $7.42-$7.62 (reflecting an uptick of 12-15% from the comparable 2024 period). The Zacks Consensus Estimate is currently pegged at $7.36 per share.

Our Take

Ecolab exited the fourth quarter of 2024 with better-than-expected results. The company registered a robust year-over-year uptick in its top and bottom lines, along with solid performances across the majority of its segments. The expansion of both margins bodes well for the stock.

Per management, growth in the United States (ECL’s largest and most profitable region) continued to be strong and growth across the rest of the world was also solid as the company was able to offset uneven macroeconomic trends. This looked promising for the stock.

However, the decline in Ecolab’s Global Healthcare & Life Sciences arm’s reported revenues reflecting the sale of the global surgical solutions business was disappointing.

Ecolab’s Zacks Rank and Key Picks

Ecolab currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader medical space that have announced quarterly results are Cardinal Health, Inc. CAH, ResMed Inc. RMD and Boston Scientific Corporation BSX.

Cardinal Health, carrying a Zacks Rank of 2 (Buy), reported second-quarter fiscal 2025 adjusted EPS of $1.93, beating the Zacks Consensus Estimate by 10.3%. Revenues of $55.26 billion outpaced the consensus mark by 0.7%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Cardinal Health has a long-term estimated growth rate of 10.7%. CAH’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 9.6%.

ResMed reported second-quarter fiscal 2025 adjusted EPS of $2.43, beating the Zacks Consensus Estimate by 5.7%. Revenues of $1.28 billion surpassed the Zacks Consensus Estimate by 1.6%. It currently carries a Zacks Rank #2.

ResMed has a long-term estimated growth rate of 16%. RMD’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 6.9%.

Boston Scientific reported fourth-quarter 2024 adjusted EPS of 70 cents, beating the Zacks Consensus Estimate by 7.7%. Revenues of $4.56 billion surpassed the Zacks Consensus Estimate by 3.5%. It currently sports a Zacks Rank #1.

Boston Scientific has a long-term estimated growth rate of 13.3%. BSX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 8.3%.

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