As factories continue to gear up following pandemic-related slowdowns, many of Ecolab's businesses have picked up as well.
While Chief Executive Doug Baker expects growth to continue in the fourth quarter, it will be at a slower pace. But the St. Paul-based company, he said, also has a "much clearer" view of both the challenges and sales opportunities in the current climate.
"Third-quarter sales and earnings showed significant improvement from the COVID-19-related lows in the second quarter, principally led by our institutional division, as recovering customer trends along with our new business wins, better customer penetration and cost-efficiency actions drove improved sequential results," Baker said Tuesday.
Sales during the third quarter were $3 billion, down from $3.2 billion in the same period a year ago but $30 million more than analysts expected.
Profits were down more than 40% to $246.2 million, or 85 cents a share. Adjusted profits were $1.15 a share, 3 cents greater than analysts' estimates.
Ecolab's shares closed Tuesday at $189.77, down 4.2%.
Baker listed accelerated investments in the hand-care and sanitizer business and advances in digital technology and customer support for when Ecolab representatives can't visit in person as positives for the quarter.
Ecolab's institutional and specialty business narrowed the year-over-year gap "substantially" over the second quarter. However, not surprisingly considering school and company cafeterias and other public spaces are still closed or with limited traffic, the unit's sales were down 22% and its operating income down 71%.
Industrial sales were down 2%, although income was up 19% compared to the same period a year ago. The much smaller health care unit saw a sales increase of 32% and an operating income jump of 82%.
"The steps we have taken this year are positioning us well, and our confidence that our business is set for strong growth going forward has never been greater," Baker said. "In the first quarter, we stated our goal for 2020 was to position us for maximum post-COVID success."
He said the company has done the work to keep that goal on track.
Catherine Roberts • 612-673-4292