Nalco rises as profit tops analysts' estimates

Nalco Holding Co., the world's largest provider of industrial water treatment services, gained the most in eight months in New York after reporting third- quarter earnings that fell less than analysts estimated.

Nalco gained 69 cents, or 3.3 percent, to $21.53 at 4:15 p.m. in New York Stock Exchange composite trading. The shares earlier touched $23.14, the highest since Sept. 8, 2008, and have increased 87 percent this year.

Chief Executive Officer J. Erik Fyrwald is eliminating workers in Europe to reduce costs. The company said yesterday that third-quarter profit excluding some items was 31 cents a share, topping the 25-cent average estimate of 13 analysts surveyed by Bloomberg.

"The upside EPS surprise was driven by raw-material cost relief and effective cost savings efforts that led to impressive margin expansion," Robert Koort, a Houston-based analyst at Goldman Sachs Group Inc., said in a report. "These trends have set the stage for a solid profit rebound once a demand recovery takes hold later in 2010." He rates the shares "buy."

Net income fell 51 percent to $28 million, or 20 cents a share, as sales declined 14 percent, Naperville-based Nalco said in a statement.

Fourth-quarter sales probably will increase from the third quarter, Fyrwald said in the statement. Asian sales in the final three months of the year will rise compared with the year-ago period, he said.