What's In The Cards For Ecolab (ECL) This Earnings Season?

St. Paul, MN-based Ecolab Inc. (NYSE:ECL) , a leading provider of water, hygiene and energy technologies and services, is expected to report first-quarter 2017 results on May 2.

Last quarter, the company reported earnings of $1.25 per share, which missed the Zacks Consensus Estimate of $1.28. Meanwhile, in the last four quarters, the company delivered an average earnings miss of 0.06%. Let’s see how things are shaping up prior to this release.

Factors at Play

Ecolab’s earnings growth despite the challenging business environment raises optimism over the company. Additionally, the company's large base of recurring revenues, industry-leading technologies and excellent field service are significant propellers. For the first quarter of 2017, Ecolab projects adjusted diluted earnings per share in the range of 77 cents to 83 cents.

We are also upbeat about the acquisition of Abednego Environmental Services. Notably, the Abednego part of Ecolab’s Nalco Water business operations is expected to boost performance this quarter. Nalco is the worldwide leader in sustainability services and integrated water treatment solutions.

A glimpse at the price performance of the stock over the past three months reveals a return of around 6.49%. This was a tad lower than the Zacks classified Chemical – Specialty sub-industry’s gain of around 6.52%. The stock’s current return is however higher than the S&P 500’s return of roughly 5.57% over the same time frame.

However, despite the slightly unfavorable price trend, with a long-term expected earnings growth rate of 13.25%, the stock has solid potential for appreciation.

Earnings Whispers

Our quantitative model doesn’t conclusively point to an earnings beat this quarter for the stock.

That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.

Zacks ESP: The Earnings ESP for Ecolab is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 81 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Ecolab carries a Zacks Rank #3 which increases the odds of an earnings beat but an Earnings ESP of 0.00% keeps our prediction inconclusive. Please note that we caution against stocks with a Zacks Ranks #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are three companies you may want to consider as our proven model shows that they have the right combination of elements to post an earnings beat this quarter:

Proteostasis Therapeutics (NASDAQ:PTI) has an Earnings ESP of +5.17% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

BioCryst Pharmaceuticals, Inc. (NASDAQ:BCRX) has an Earnings ESP of +31.58% and a Zacks Rank #2.

Hill-Rom Holdings, Inc. (NYSE:HRC) has an Earnings ESP of +1.27% and a Zacks Rank #2.

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