Ecolab 4Q Net Falls 29% Amid Write-Down; Gives Weak View

   DOW JONES NEWSWIRES 
 

Ecolab Inc.'S (ECL) fourth-quarter net income declined 29% amid a $19 million investment write-down and falling margins as the company also projected first-quarter results below expectations.

Shares slid 8% in early trading to $31.44; the stock is down more than one-third since late September.

Ecolab, which reiterated its 2009 view, sees projected "modest" first-quarter sales growth excluding impacts from the stronger dollar and earnings excluding items of 30 cents to 34 cents a share. Analysts surveyed by Thomson Reuters projected earnings of 41 cents and a 1% rise in unadjusted revenue to $1.45 billion. The stronger dollar has been resulting in lower top-line results the past several quarters for companies.

Deterioration in the global economy has pinched profits for companies that provide cleaning products and services. In response, companies in the sector continue to trim jobs and tweak product lines amid the downturn.

Ecolab posted fourth-quarter net income of $80 million, or 33 cents a share, compared with $113.4 million, or 45 cents a share a year earlier. Excluding items including the investment write-down, earnings rose to 45 cents from 40 cents, in line with company's October forecast.

Revenue increased 3% to $1.48 billion. Measured in fixed currencies, sales rose 7%. Analysts polled by Thomson Reuters were recently looking for $1.51 billion.

Gross margins fell to 48.1% from 50.2% amid cost increases.

Revenue for Ecolab's core business, the cleaning and sanitizing unit, was up 10% in the U.S., with almost half of that due to acquisitions. Other domestic revenue edged down 1% as pest-elimination revenue slowed. International revenue increased 6% on a fixed-currency basis, helped by double-digit gains in Latin America.

-By Shirleen Dorman, Dow Jones Newswires; 201-938-2310; [e-mail]