Ecolab Inc. (ECL) has reported a 3.02 percent fall in profit for the quarter ended Jun. 30, 2015. The company has earned $302 million, or $1 a share in the quarter, compared with $311.40 million, or $1.02 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $323.70 million, or $1.08 a share compared with $314.40 million or $1.03 a share, a year ago. Revenue during the quarter dropped 5.02 percent to $3,389.10 million from $3,568.20 million in the previous year period. Gross margin for the quarter expanded 21 basis points over the previous year period to 46.70 percent. Total expenses were 87.08 percent of quarterly revenues, up from 85.65 percent for the same period last year. That has resulted in a contraction of 144 basis points in operating margin to 12.92 percent.
Operating income for the quarter was $437.80 million, compared with $512.20 million in the previous year period.
However, the adjusted operating income for the quarter stood at $514.40 million compared to $507.20 million in the prior year period. At the same time, adjusted operating margin improved 96 basis points in the quarter to 15.18 percent from 14.21 percent in the last year period.
Commenting on the quarter, Douglas M. Baker, Jr., Ecolab chairman and chief executive officer said, "We delivered a solid quarter as our focus on innovative products and effective on-site service drove better results and improved value for customers, enabling us to once again outpace generally slower economic trends and substantial currency headwinds."
For fiscal year 2015, Ecolab Inc. expects diluted earnings per share to be in the range of $4.45 to $4.60 on adjusted basis.
For the third-quarter, It forecasts revenue to grow in the range of percent to percent. It expects diluted earnings per share to be in the range of $1.24 to $1.31 on an adjusted basis for the same period.
Working capital drops significantly
Ecolab Inc. has witnessed a decline in the working capital over the last year. It stood at $525 million as at Jun. 30, 2015, down 34.80 percent or $280.20 million from $805.20 million on Jun. 30, 2014. Current ratio was at 1.12 as on Jun. 30, 2015, down from 1.20 on Jun. 30, 2014. Cash conversion cycle (CCC) has decreased to 46 days for the quarter from 85 days for the last year period. Days sales outstanding went down to 33 days for the quarter compared with 66 days for the same period last year.
Days inventory outstanding has decreased to 37 days for the quarter compared with 66 days for the previous year period. At the same time, days payable outstanding went down to 24 days for the quarter from 47 for the same period last year.
Debt moves up marginally
Ecolab Inc. has witnessed an increase in total debt over the last one year. It stood at $7,309.50 million as on Jun. 30, 2015, up 2.53 percent or $180.70 million from $7,128.80 million on Jun. 30, 2014. Total debt was 38.04 percent of total assets as on Jun. 30, 2015, compared with 36.35 percent on Jun. 30, 2014. Debt to equity ratio was at 1.06 as on Jun. 30, 2015, up from 0.96 as on Jun. 30, 2014. Interest coverage ratio deteriorated to 7.15 for the quarter from 7.74 for the same period last year.
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