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TheStreet Open House

Ecolab Delivers Strong Third Quarter

Stocks in this article: ECL

Global Water sales, when measured at fixed currency rates, were $543 million, increasing 5% when compared with third quarter 2011 pro forma fixed currency sales. Continued good trends in North America and Latin America offset soft demand from heavy industrial users in Europe and Asia in the quarter. Fixed currency operating income was $70 million in the third quarter, representing a 25% increase when compared with third quarter 2011 pro forma fixed currency operating income. When measured at public currency rates, Global Water sales were $538 million and operating income was $69 million.

Global Paper sales, when measured at fixed currency rates, declined 4% to $202 million in the third quarter when compared with third quarter 2011 pro forma fixed currency sales, reflecting the strategic elimination of certain low margin business. Modest growth in Latin America and Europe sales were more than offset by soft packaging sales in Asia. Fixed currency operating income increased 16% to $24 million in the third quarter when compared with third quarter 2011 pro forma fixed currency operating income. Third quarter 2011 operating income included an unusual bad debt expense; adjusted for that charge, third quarter 2012 Global Paper operating income rose 5%. When measured at public currency rates, Global Paper sales were $201 million and operating income was $24 million.

Global Energy sales, when measured at fixed currency rates, grew 20% to $587 million in the third quarter when compared with third quarter 2011 pro forma fixed currency sales, with strong growth in all business segments. Fixed currency operating income increased 29% to $94 million in the third quarter when compared with third quarter 2011 pro forma fixed currency operating income. When measured at public currency rates, Global Energy sales were $584 million and operating income was $94 million.

The Corporate segment includes amortization from the Nalco merger intangible assets, merger integration costs, investments in the development of business systems and other corporate investments made as part of Ecolab’s ongoing efforts to improve our efficiency and returns. The Corporate segment also includes special gains and charges. Special gains and charges for the third quarter 2012 of $31 million ($22 million after-tax) primarily consisted of charges for Nalco merger-related restructuring and integration costs as well as charges from the European restructuring plan previously announced in 2011. Special gains and charges for the third quarter 2011 of $28 million ($24 million after-tax) primarily consisted of charges from the previously announced European restructuring as well as Nalco merger and integration costs.

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