Ecolab Inc. ECL reported third-quarter 2026 adjusted earnings of $2.18 per share, up 5% year over year. The figure was in line with the Zacks Consensus Estimate.
GAAP EPS for the quarter was $1.95, down 5% year over year.
Revenues rose 13% year over year to $4.69 billion, surpassing the consensus estimate by 0.4%. Organic sales increased 7%. Volume growth accelerated to 2%, and pricing improved to 5%. Strong demand across Global High-Tech and Life Sciences supported the performance.
ECL's Sales Growth Accelerates
Ecolab Digital sales increased 34% year over year to $129 million, driven by strong growth across software and enabling hardware subscriptions.
Organic sales reached $4.45 billion compared with $4.17 billion in the year-ago quarter. Volume growth improved despite ongoing customer disruptions in the Middle East. Stronger pricing offset rising commodity costs and supported stable organic gross margin.
Ecolab's Global Water Business Gains Momentum
The Global Water segment's fixed-currency sales increased 20% year over year to $2.48 billion, including an 11% contribution from the Ovivo Electronics and CoolIT acquisitions. Organic sales grew 9%, led by 63% growth in Global High-Tech, reflecting robust demand across microelectronics and data centers.
Food & Beverage organic sales rose 8%, supported by new business wins from One Ecolab's growth strategy. Light Water benefited from improved demand in manufacturing and institutional markets. Heavy Water and Paper returned to growth, aided by pricing improvements and stabilizing market trends.
Organic operating income increased 9% to $391.3 million as stronger pricing and productivity gains more than offset commodity inflation and growth-related investments.
ECL's Institutional & Specialty Business Holds Steady
The Global Institutional & Specialty segment's fixed-currency and organic sales increased 3% each to $1.64 billion.
Institutional maintained steady growth as pricing and new business wins countered challenging industry conditions, including a mid-single-digit decline in North American restaurant foot traffic. Specialty recorded mid-single-digit growth, supported by market share gains in quick-service restaurants and food retail.
Organic operating income increased 8% to $404.9 million. Organic operating margin expanded 110 basis points (bps) to 24.7%, reflecting improved productivity and pricing execution.
Ecolab's Growth Engines Deliver Strong Results
The Global Pest Elimination segment's fixed-currency sales increased 9% year over year to $363.5 million. Organic sales rose 8%, supported by strong demand across food and beverage, food retail and restaurants. Targeted North American acquisitions contributed 1% to growth.
Organic operating income increased 7% year over year to $74.5 million. Continued investments in pest intelligence weighed on profitability, with the company expecting operating margins in the high-teens to 20% range over the coming quarters. More than 800,000 connected pest devices have already been deployed.
Global Life Sciences reported 17% growth in fixed-currency and organic sales to $215.8 million. Strong share gains in bioprocessing, personal care and purification supported performance, along with favorable comparisons to prior-year plant maintenance.
Organic operating income surged 49% year over year to $50.2 million, driven by supply chain efficiencies and higher sales.
Ecolab Inc. Price, Consensus and EPS Surprise
Ecolab Inc. price-consensus-eps-surprise-chart | Ecolab Inc. Quote
ECL’s Margin Analysis
In the quarter under review, Ecolab’s reported gross profit increased 10.9% year over year to $2.07 billion. However, the reported gross margin contracted 70 basis points (bps) to 44.1%. Adjusted gross margin also declined 70 bps to 44.1%, reflecting the impact of recent acquisitions. Organic gross margin improved 10 bps to 44.9% as stronger pricing offset rising commodity costs.
Selling, general and administrative expenses increased 9.1% year over year to $1.18 billion.
Adjusted operating profit totaled $893.4 million, up 13.6% from the prior-year quarter. The adjusted operating margin expanded 10 bps to 19%, while the organic operating margin improved 70 bps to 19.6%, supported by strong sales growth and improved productivity.
Ecolab’s Financial Position
Ecolab exited the third quarter of 2026 with cash and cash equivalents of $722.3 million, down sharply from $5.14 billion at the end of the second quarter. Total debt remained relatively stable at $13.19 billion compared with $13.18 billion at the end of the preceding quarter.
The sequential decline in cash followed the completion of the CoolIT acquisition, for which Ecolab raised additional financing the prior quarter. Net interest expense surged to $124.8 million from $55.3 million a year earlier, reflecting higher financing costs associated with the Ovivo Electronics and CoolIT acquisitions.
Meanwhile, Ecolab has a consistent dividend-paying history, with five-year annualized dividend growth of 8.75%.
ECL Raises 2026 Earnings Outlook
Ecolab expects 2026 adjusted earnings of $8.10-$8.20 per share compared with its previous guidance of $8.05-$8.25. The revised range indicates growth of 8%-9% and incorporates an approximately six-percentage-point headwind from short-term amortization and financing costs related to the CoolIT acquisition.
For the fourth quarter, ECL expects adjusted earnings of $2.13-$2.23 per share, representing growth of 2%-7%. Reported sales are projected to increase 12%-14%, while organic sales growth is expected to remain strong at 6%-7%.
Management expects fourth-quarter adjusted operating margin of approximately 19% and organic operating margin of about 20%. Stronger pricing, continued volume growth and contributions from the Ovivo Electronics and CoolIT acquisitions are expected to support the outlook.
ECL’s Zacks Rank & Key Picks
Ecolab currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks from the broader medical space are OPKO Health OPK, Globus Medical GMED and Merit Medical Systems MMSI.
OPKO Health, currently flaunting a Zacks Rank #1 (Strong Buy), reported a second-quarter 2026 adjusted loss of 1 cent per share, which surpassed the Zacks Consensus Estimate by 87.5%. Revenues of $163.6 million beat the Zacks Consensus Estimate by 24.7%. You can see the complete list of today’s Zacks #1 Rank stocks here.
OPK has an estimated earnings growth rate of 23.3% for 2026. The company’s earnings beat estimates in each of the trailing four quarters, the average surprise being 95.1%.
Globus Medical, currently carrying a Zacks Rank #2 (Buy), reported a second-quarter 2026 adjusted earnings per share (EPS) of $1.34, which surpassed the Zacks Consensus Estimate by 19.6%. Revenues of $789.6 million beat the Zacks Consensus Estimate by 0.4%.
GMED has an estimated long-term earnings growth rate of 12.4%. The company’s earnings beat estimates in each of the trailing four quarters, the average surprise being 27.9%.
Merit Medical Systems, carrying a Zacks Rank #2 at present, reported second-quarter 2026 adjusted EPS of $1.19, which beat the Zacks Consensus Estimate by 23.9%. Revenues of $418.8 million surpassed the Zacks Consensus Estimate by 3.5%.
MMSI has an estimated long-term earnings growth rate of 10.4%. Merit Medical Systems’ earnings surpassed estimates in the trailing four quarters, with the average surprise being 14.1%.
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Ecolab Inc. (ECL): Free Stock Analysis Report
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