Ecolab Inc. ECL reported second-quarter 2026 adjusted earnings of $2.09 per share, up 10.6% year over year. The figure surpassed the Zacks Consensus Estimate by 0.4%.
GAAP EPS for the quarter was $1.90, up 3.3% year over year.
Revenues rose 9.7% year over year to $4.42 billion, surpassing the consensus estimate by 0.5%. Organic sales increased 5%, aided by stronger pricing, volume growth and solid demand across Ecolab’s core businesses and growth engines.
Shares of Ecolab gained nearly 1.33% in today’s pre-market trading.
ECL’s Sales Growth Accelerates
Ecolab’s Digital sales increased 27% year over year to $121 million, driven by strong growth across software and enabling hardware subscriptions.
Organic sales were $4.28 billion, up 5% from $4.09 billion in the year-ago quarter. Reported volume increased 1% despite a nearly 1% headwind from customer operations disrupted by the Middle East conflict. Pricing improved to 4%, reflecting the initial benefits of the company’s energy surcharge implementation.
Ecolab’s Core Businesses Gain Momentum
The Global Water segment’s fixed-currency sales increased 10% year over year to $2.22 billion, including a 6% contribution from the Ovivo Electronics acquisition. Organic sales rose 4%, led by 29% growth in Global High-Tech and accelerating gains in Food & Beverage and Light Water.
Organic operating income for the segment increased 1% to $333.6 million. Improved pricing gradually offset higher commodity costs and growth-related investments. Meanwhile, the impact of softer demand in Heavy Water and Paper continued to ease on the back of new business wins.
The Global Institutional & Specialty segment’s fixed-currency and organic sales increased 4% each to $1.62 billion. Institutional benefited from improved growth among hospitality customers, while Specialty posted mid-single-digit growth, supported by share gains in quick-service restaurants and food retail.
ECL’s Growth Engines Stay Strong
The Global Pest Elimination segment’s fixed-currency sales rose 9% year over year to $350.5 million. Organic sales increased 7%, driven by strong gains across restaurants, food retail and food and beverage. Targeted acquisitions in North America contributed 2% to growth.
The segment’s organic operating income increased 12% year over yearto $70.3 million. Strong sales growth and improved productivity more than offset continued investments in the business, including pest intelligence capabilities.
The Global Life Sciences segment’s fixed-currency and organic sales increased 15% each to $221 million. The improvement was driven by continued share gains in bioprocessing and pharmaceutical and personal care, along with better performance in purification.
Organic operating income surged 46% year over yearto $58.5 million, reflecting accelerated sales growth and strong bioprocessing performance. These gains more than offset higher commodity costs and investments in innovation, capacity and global capabilities.
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 8% year over year to $1.95 billion. However, the reported gross margin contracted 70 basis points (bps) to 44.1%. Adjusted gross margin declined 60 bps to 44.2%, reflecting the impact of the Ovivo Electronics acquisition. Organic gross margin improved 10 bps to 44.9% as stronger pricing offset rising commodity costs.
Selling, general and administrative expenses increased 6.9% year over year to $1.14 billion.
Adjusted operating profit totaled $809 million, up 9.7% from the prior-year quarter. The adjusted operating margin remained unchanged at 18.3%, while the organic operating margin expanded 40 bps to 18.8%.
Ecolab’s Financial Position
Ecolab exited the second quarter of 2026 with cash and cash equivalents of $5.14 billion, up sharply from $519.8 million at the end of the first quarter. Total debt increased to $13.18 billion from $8.49 billion over the same period.
The sequential jump in cash appears to be primarily financing-driven. Ecolab raised new debt to fund recent acquisitions, including CoolIT, and a portion of those proceeds was likely still held in cash at quarter-end. Net interest expense also increased to $73.1 million from $63.2 million a year earlier, reflecting the impact of acquisition-related borrowings. Ecolab repurchased approximately 1.2 million shares during the quarter.
Meanwhile, Ecolab has a consistent dividend-paying history,with five-year annualized dividend growth of 8.75%.
ECL Raises 2026 Earnings Outlook
Ecolab raised its 2026 adjusted earnings guidance to $8.05-$8.25 per share from $8.03-$8.23. The revised range indicates growth of 7%-10% and incorporates short-term non-cash amortization and financing costs related to the CoolIT acquisition.
For the third quarter, ECL expects adjusted earnings of $2.13-$2.23 per share, representing growth of 3%-8%. In the second half, reported sales are projected to increase 12%-14%, while organic sales growth is expected to accelerate to 6%-7%.
Management expects second-half adjusted operating margin of approximately 19% and organic operating margin of about 20%. Accelerating pricing, ongoing share gains and improved productivity are expected to support the outlook.
ECL’s Zacks Rank & Key Picks
Ecolab currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader medical space are McKesson MCK, Phibro Animal Health PAHC and Cardinal Health CAH.
McKesson carries a Zacks Rank #2 (Buy) at present and has an estimated long-term growth rate of 13.7%. GMED’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 3.09%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Globus Medical’s shares have gained 8.8% against the industry’s 12.7% decline in the year-to-date period.
Phibro Animal Health, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 21.5%. PAHC’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 16.25%.
Phibro Animal Health stock has climbed 44.2% against the industry’s 17.1% decline in the year-to-date period.
Cardinal Health, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 17%. CAH’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 10.27%.
Cardinal Health’s shares have lost 2.6% compared with the industry’s 3.1% decline in the year-to-date period.
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