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During 4Q15, $ECL substantially completed the restructuring charges within the Energy Restructuring Plan. The company expects certain immaterial actions to continue into 2016. $ECL also expects ongoing cash payments to continue into 2016. Cumulative restructuring charges of $82MM were materially consistent with the company's expectation of $80MM.
During 1Q17, $ECL's Global Industrial fixed currency sales rose by 3%, helped by strong gains in Paper and modest growth in Food & Beverage. Global Institutional acquisition adjusted fixed currency sales rose 3%, led by Specialty and Healthcare. Global Energy fixed currency sales fell by 2% .
$ECL said that its institutional, industrial and other business accelerated in 4Q16, but was not as much as anticipated. The company added that it expects strong earnings growth in 2017, with better YonY acquisition adjusted fixed currency growth in the institutional, industrial and other segments.
During 4Q16, $ECL's Global Industrial fixed currency sales rose 2%, helped by strong gains in Paper, with modest increase in Food & Beverage and Water. Global Institutional fixed currency sales grew 5%, helped by Specialty and Healthcare businesses. Global Energy fixed currency sales fell 14%, due to decrease in upstream and downstream businesses.
Cleaning, food-safety and pest-control services provider $ECL reported 75% increase in 4Q16 earnings, mainly due to increase in operating income. Net income rose to $366.3MM from $208.9MM during 4Q15. Diluted EPS rose 80% to $1.24 from $0.69 in 4Q15. Net sales fell 2% to $3.35Bil. Excluding items, $ECL earned $1.25 per share.
In the Latin American market, $ECL is having new business success and it has a solid base in the Food Safety business and the Water business. $ECL is getting significant pricing due to currency devaluation, which helps offset higher raw materials costs. $ECL believes this business will remain resilient and see strong performance in coming quarters.
$ECL said some of the new productivity initiatives it has rolled out will take a couple of years to realize the full benefit. The company is continuing to roll out new technologies in the Institutional field, for which it has started absorbing costs but has not fully realized benefits. There are many opportunities to drive productivity and margin.
$ECL has done a lot of work in the Energy business to reformulate products, lower costs and position the company for improved margins going forward. $ECL expects to see a modest improvement throughout 2017 particularly in 2H17 in the energy market. $ECL expects to have low single digit or mid single digit sales and sufficient operating income.
$ECL's Mining business is expected to rebound in 4Q16 as it benefits from new sales. The Water business will improve in 4Q16 and throughout 2017. The Healthcare business grew 6% in 3Q16 and expects to improve in 4Q16 as it benefits from new business efforts.
$ECL said new business gains and new product introductions drove acquisition-adjusted fixed currency sales growth in the Institutional, Industrial and Other segments during 3Q16, offsetting a moderate decline in Energy sales. Product innovation lowered delivered product costs.
$ECL cut the upper end of its FY16 adjusted EPS growth outlook to $4.35 to $4.45 range, compared to its prior forecast of $4.35 to $4.50 range. The company expects 4Q16 adjusted diluted earnings per share in the $1.23 to $1.33 range, compared with adjusted diluted earnings per share of $1.22 it posted a year ago.
$ECL reported sales growth and margin expansion in its Global Institutional, Global Industrial and Other segments. This more than offset lower Global Energy segment results to post a 7% 3Q16 adjusted diluted earnings per share growth before currency effects, the company said.
Water, hygiene and energy technology company $ECL reported a higher 3Q16 profit, helped by lower charges as compared to the year-ago quarter. The company reported earnings of $374MM, or $1.27 per share, up 45% from $258MM, or $0.86 per share a year ago. Revenue fell 2% to $3.39Bil.
Dmitry Silversteyn of Longbow Research asks for some color on the food and beverage market. CEO Doug Baker replied that in 2H16 $ECL would expect F&B to be equal or a little better than in 1H16, which is in the 4% range, probably moving into the 5% range. Doug added that the company is bullish about F&B's near-term and long-term future.
Dan Rizzo of Jefferies asks if $ECL is at or near 35% of the vitality index. CEO Doug Baker replied that the company is right around 30%, and 35% is a little different by business unit. He added that on average it is around 33%, which is just under the company's target.
Gary Bisbee of RBC Capital Markets asks for an update on Swisher. $ECL CEO Doug Baker said Swisher is more or less on plan and as predicted. Doug added that it's progressing and the company will start seeing positives out of Swisher either in 4Q16 or 1Q17.