Ecolab misses second-quarter profit estimates on reduced demand

Reuters
Jul 29
Ecolab misses second-quarter profit estimates on reduced demand

July 29 (Reuters) - Water solutions company Ecolab ECL.N on Tuesday posted an adjusted profit for the second quarter that narrowly missed Wall Street estimates, hit by reduced demand for its services that include cleaning, sanitization and cooling.

Ecolab's shares fell 2.88% to $262 in premarket trading.

The company forecast third-quarter adjusted profit between $2.02 and $2.12 per share, the mid-point of which is in line with analysts' estimate of $2.07 per share, according to data compiled by LSEG data.

Ecolab said that in the near-term, the global operating environment remains unpredictable, characterized by constantly evolving end-market demand and impacts from geopolitics and international trade policy.

President Donald Trump's tariffs on U.S. trade partners and the retaliatory levies from countries such as China have threatened a rise in raw material costs for companies such as Ecolab.

"I see little impact to Ecolab from tariffs. They already implemented surge pricing to account for tariffs, so any tariff impacts should be more of a pass through cost for Ecolab," Morningstar analyst Seth Goldstein had said prior to the earnings announcement.

Sales at the company's global institutional and specialty segment, which makes cleaning and sanitizing products for customers such as quick-serving restaurant chains and food retailers, fell 2.4% to $1.51 billion in the second quarter, from a year earlier.

However, sales from the global water unit, Ecolab's biggest segment that provides water treatment and cleaning solutions to large industrial customers, rose 2.4% to $1.91 billion from last year.

The Saint Paul, Minnesota-based company posted a profit of $1.89 per share on an adjusted basis for the three months ended June 30, compared with analysts' average estimate of $1.90.

(Reporting by Katha Kalia in Bengaluru; Editing by Shreya Biswas and Shailesh Kuber)

((Katha.Kalia@thomsonreuters.com;))

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