$ECL’s third-quarter revenue was $4.695 billion, up 13% year over year, while organic growth accelerated to 7%. Its biggest growth engine, Global High-Tech, saw organic sales surge 63%, while Life Sciences and Water Treatment also rebounded. Adjusted operating profit rose 14%, and the organic operating margin expanded by 70 basis points.
But net income attributable to shareholders fell 6% year over year to $551.3 million. Diluted EPS on a reported basis was also lower, at $1.95 versus $2.05 in the year-ago quarter. The decline was primarily due to amortization and financing costs from last year’s high-tech acquisitions (Ovivo Electronics and CoolIT), which the company said weighed on adjusted EPS by about 10%. Full-year guidance is set at $8.10–$8.20 (up 8% to 9% year over year), with the range narrowed from the previous outlook. In the near term, the company is still carrying these integration costs.
Demand is accelerating, but the income statement is still carrying the installment bill for acquisitions—the market wants growth, while the company is delivering real earnings diluted by amortization.
When revenue grows 13% but net income goes into reverse, do you put more faith in the acceleration at the top line or the dilution at the bottom line?
But net income attributable to shareholders fell 6% year over year to $551.3 million. Diluted EPS on a reported basis was also lower, at $1.95 versus $2.05 in the year-ago quarter. The decline was primarily due to amortization and financing costs from last year’s high-tech acquisitions (Ovivo Electronics and CoolIT), which the company said weighed on adjusted EPS by about 10%. Full-year guidance is set at $8.10–$8.20 (up 8% to 9% year over year), with the range narrowed from the previous outlook. In the near term, the company is still carrying these integration costs.
Demand is accelerating, but the income statement is still carrying the installment bill for acquisitions—the market wants growth, while the company is delivering real earnings diluted by amortization.
When revenue grows 13% but net income goes into reverse, do you put more faith in the acceleration at the top line or the dilution at the bottom line?