Ecolab stock falls as in-line earnings temper investor optimism

[Ecolab headquarters in Saint Paul, Minnesota, USA]
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Shares of Ecolab (NYSE:ECL [https://seekingalpha.com/symbol/ECL]) fell as much as 5.1% in the first half-hour of trading Tuesday after the cleaning, sanitation and water treatment company reported [https://seekingalpha.com/news/4509240-ecolab-beats-top-line-estimates-initiates-q4-and-updates-fy-outlook] third-quarter results.

The company posted adjusted earnings, which excludes special gains and charges, of $2.07 a share, matching analyst estimates. Revenue rose 4% to $4.17 billion, topping the consensus forecast of $4.12 billion.

NET INCOME COMPARISON

Net income fell 21% to $585 million, or $2.05 a share, compared with $736.5 million, or $2.58 a share, in the same quarter a year earlier. The decline reflected the absence of a one-time gain from last year’s sale of the company’s global surgical solutions business. Wall Street’s estimate for earnings was $2.01 a share under generally accepted accounting principles.

SEGMENT PERFORMANCE AND MARGINS

Ecolab (NYSE:ECL [https://seekingalpha.com/symbol/ECL]) said organic sales grew 3%, driven by 3% value pricing and 1% volume growth. The Institutional & Specialty, Pest Elimination and Life Sciences units all reported strong performance, while the Water segment benefited from accelerating Food & Beverage growth and double-digit gains in Global High-Tech, which more than offset weakness in Basic Industries and Paper.

Reported operating income margin was 18.3%, while the organic operating income margin expanded 110 basis points to 18.7%, aided by improved productivity and steady demand in higher-margin businesses.

CEO COMMENTARY

“Our team once again delivered a strong and consistent quarter of double-digit earnings growth,” Christophe Beck, chairman and chief executive of Ecolab (ECL [https://seekingalpha.com/symbol/ECL]), said in a statement. “This very strong performance was partially offset by ongoing soft market demand in our underperforming businesses, Basic Industries and Paper.”

Beck added that Ecolab’s (ECL [https://seekingalpha.com/symbol/ECL]) “growth engines,” including Life Sciences, Pest Elimination, Global High-Tech and Ecolab Digital, collectively grew at a double-digit rate, contributing to expanding profitability. Ecolab Digital sales alone jumped 25% to $96 million.

OUTLOOK

Looking ahead, Ecolab (ECL [https://seekingalpha.com/symbol/ECL]) narrowed its full-year 2025 adjusted EPS guidance to a range of $7.48 to $7.58, representing 12% to 14% growth from 2024. For the fourth quarter, the company expects adjusted earnings between $2.02 and $2.12 per share, implying 12% to 17% growth year over year.

Beck said Ecolab (ECL [https://seekingalpha.com/symbol/ECL]) is “very well positioned for strong and steady 12%–15% earnings growth in 2026,” driven by ongoing innovation and investments in high-margin businesses.

MORE ON ECOLAB

* Ecolab: Demanding Valuations, Muted Performance [https://seekingalpha.com/article/4829368-ecolab-demanding-valuations-muted-performance]
* Ecolab Inc. (ECL) Investor Day 2025 Call (Transcript) [https://seekingalpha.com/article/4819720-ecolab-inc-ecl-analyst-investor-day-transcript]
* Ecolab Inc. (ECL) Analyst/Investor Day - Slideshow [https://seekingalpha.com/article/4819610-ecolab-inc-ecl-analyst-investor-day-slideshow]
* Ecolab beats top-line estimates; initiates Q4 and updates FY outlook [https://seekingalpha.com/news/4509240-ecolab-beats-top-line-estimates-initiates-q4-and-updates-fy-outlook]
* Ecolab Q3 2025 Earnings Preview [https://seekingalpha.com/news/4508924-ecolab-q3-2025-earnings-preview]