Ecolab improves 4Q earnings, but shares plummet

Despite posting higher profits in the fourth quarter of 2009, ECL shares sank over 5% Thursday as a result of slightly missing analyst estimates.

Ecolab had reported EPS of $0.48, which was below the street forecast of $0.56. This represents a 45% increase from the 4th quarter EPS in 08 of $0.33.

Ecolab reported a profit of $115.8 million, or 48 cents per share. That's up from $80 million, or 33 cents per share, in the last quarter of 2008. Excluding one-time items, the company said it earned 55 cents per share.

Revenue grew 5% to $1.56 billion in the quarter, which is identical to what analysts were expecting.

Going forward,in 2010, ECL said they expected to earn $2.17 and $2.25 per share while analysts were expecting $2.26. Management said they feel that demand is starting to bottom, which is a good sign.

Here at UASBIG, we feel that Ecolab is still a hold because of their unique and diversified business.

I will update the model shortly and blog about any changes to my price target.