Ecolab To Cut 4% Of Work Force; Backs 2008, 2009 View

   DOW JONES NEWSWIRES 
 

Ecolab Inc. (ECL) said it would cut 1,000 jobs, or 4% of its work force, and planned plant reductions, business closures and product line changes to adjust to the weak economic climate.

Despite the restructuring efforts and tough economic climate, Ecolab reaffirmed its earnings expectations for the fourth quarter, 2008 and 2009.

Ecolab, which provides cleaning, food safety and health-production products and services, said it will record a charge of $18 million in the fourth quarter and charges of $42 million to $49 million in 2009 as a result of the restructuring actions.

The plan, which includes closing two health-care businesses and reducing plan and distribution centers to streamline the company's supply chain, is expected to save about $45 million to $50 million annually, or 20 cents per share. Pretax savings of about $50 million, or 13 cents a share, are planned for 2009.

Chairman, President and Chief Executive Douglas M. Baker said the steps would lower overall operating costs, while focusing on global pest elimination expansion, health-care infection prevention business and water and energy growth initiatives.

Looking ahead, Ecolab backed its November views for adjusted earnings of $1.85 to $1.87 a share in 2008 and $1.95 to $2.05 in 2009. Additionally, the company reaffirmed its expected per-share earnings of 44 cents to 46 cents for the fourth quarter.

Shares of Ecolab were up 1% to $33.33 in after-hours trading.

- By John Kell, Dow Jones Newswires; 201-938-5285; [e-mail]

Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary. You can use this link on the day this article is published and the following day.