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Ecolab Inc. Reports Operating Results (10-Q)

August 05, 2010 | About:
10qk

10qk

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Ecolab Inc. (ECL) filed Quarterly Report for the period ended 2010-06-30.

Ecolab Inc. has a market cap of $11.55 billion; its shares were traded at around $49.5 with a P/E ratio of 23.2 and P/S ratio of 1.9. The dividend yield of Ecolab Inc. stocks is 1.3%. Ecolab Inc. had an annual average earning growth of 10.8% over the past 10 years. GuruFocus rated Ecolab Inc. the business predictability rank of 4-star.ECL is in the portfolios of Bill Frels of Mairs & Power Inc. , Ron Baron of Baron Funds, Pioneer Investments, Jeremy Grantham of GMO LLC, Bruce Kovner of Caxton Associates, Jim Simons of Renaissance Technologies LLC, Dodge & Cox.

Highlight of Business Operations:

· Diluted earnings per share attributable to Ecolab increased 32% to $0.54 for the second quarter of 2010 compared to $0.41 in the second quarter of 2009. Excluding the impact of special gains and charges, and discrete tax items, adjusted diluted earnings per share attributable to Ecolab increased 12% to $0.56 for the second quarter of 2010 compared to $0.50 in the second quarter of 2009.

Consolidated net sales for the second quarter ended June 30, 2010 were $1.5 billion, an increase of 5% compared to last year. For the first six months of 2010, net sales increased 6% to $3.0 billion. When measured in fixed rates of currency exchange, sales increased 3% for both the second quarter and first six months of 2010. The components of the sales increase are shown below.

In 2009 we undertook restructuring and other cost-saving actions in order to streamline operations and improve efficiency and effectiveness. We recorded restructuring expense of $24 million ($19 million after tax) or $0.08 per diluted share and $57 million ($40 million after tax) or $0.17 per diluted share during the second quarter and six months ended June 30, 2009, respectively. Restructuring expense on the Consolidated Statement of Income has been included both as a component of cost of sales and as a component of special gains and charges, as shown in the table above. Further details related to these restructuring expenses are included in Note 2.

Net interest expense totaled $15.0 million in the second quarter of 2010, compared with $15.2 million in the second quarter of 2009. Net interest expense for the first six months of 2010 and 2009 was $30.0 million and $31.0 million, respectively. The decline in our net interest expense has been due to lower commercial paper borrowing rates combined with lower borrowing amounts as well as lower interest expense related to hedging activities, partially offset by lower interest income.

Discrete tax expense for the second quarter and first six months of 2010 was $2.1 million and $1.3 million, respectively. The discrete tax items for the second quarter of 2010 primarily include a $2 million charge for the impact of international tax costs from optimizing our business structure. Discrete tax items for the first quarter of 2010 included a $5 million charge due to the passage of the U.S. Patient Protection and Affordable Care Law which changes the tax deductibility related to federal subsidies and resulted in a reduction of the value of the companys deferred tax assets related to the subsidies. This charge was offset by a $6 million tax benefit from the settlement of an international tax audit.

Discrete tax expense for the second quarter and first six months of 2009 was $0.9 million and $0.7 million, respectively.

Read the The complete Report

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