Ecolab to further boost gross profit despite difficult economy

30 April 2013 20:01  [Source: ICIS news]

HOUSTON (ICIS)--Ecolab aims to further improve gross profit and margins in coming quarters even though economic conditions are expected to remain difficult for the remainder of the year, the CEO of the US-based water and energy services and water chemicals firm said on Tuesday.

“In total, we see gross profit increasing for the year,” Douglas Baker told analysts during Ecolab’s 2013 first-quarter results conference call.

Raw material pricing pressures should be modest in 2013, with product pricing more than covering raw material cost increases, Baker said.

“We don’t believe, that [raw material pricing pressure], at his point, based on our forecast, is going to be any kind of headline story for the year,” he added.

At the same time, Ecolab expects the overall economy to remain difficult throughout 2013, Baker said.

As for Europe, conditions there were “softer than last year, no doubt about it,” he added.

For the three months ended 31 March, Ecolab’s gross profit was $1.3bn (€988m) for a gross margin of 45.5%, up from $1.2bn and a margin of 42.6% in the first quarter of 2012.

During the first quarter, Ecolab benefited from better volumes, pricing, and cost efficiencies, as well as lower interest expenses and a lower tax rate.

For the full year of 2013, Ecolab raised its guidance for adjusted earnings per share to a range of $3.45-3.55, up from its previous guidance of $3.38-3.48.

($1 = €0.76)

By: Stefan Baumgarten
+1 713 525 2653

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