Loading...
01/10 15:45
Loading...
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call summary highlights positive financial performance, with improved margins across segments and an increase in dividends. The Q&A session reveals cautious optimism about growth, particularly in bioprocessing and aftermarket segments. While some uncertainties exist, such as muted bioprocessing growth and cautious demand in China, the overall sentiment is positive due to strong shareholder returns, margin expansion, and strategic focus on growth areas. The lack of market cap data prevents precise impact assessment, but the positive elements suggest a stock price increase in the short term.
Total Sales $981 million, a 5% increase year-over-year, driven by volume growth, currency translation benefits, and pricing.
Adjusted EPS $1.03, up approximately 10% year-over-year.
Gross Margin 34.8%, down 140 basis points from 2024, primarily due to the impact of tariff-related inflation on LIFO inventory valuation.
Operating Margin 16.4%, a record high, up 10 basis points year-over-year.
Mobile Solutions Sales $588 million, a 2% increase versus prior year. Aftermarket sales were $468 million, up 3%, driven by strong demand in the OE channel and market share gains in the independent channel. Off-Road sales of $95 million increased 5%, while On-Road sales of $26 million declined 20% due to cyclical declines in global truck production.
Industrial Solutions Sales $310 million, an 8% increase year-over-year. IFS sales grew 11% due to new equipment sales in dust collection in Europe and North America and power generation project timing. Aerospace and Defense sales were $47 million, a 6% decrease due to a decline in defense sales.
Life Sciences Sales $82 million, a 14% increase year-over-year. Growth was driven by double-digit increases in food and beverage and disk drive sales, partially offset by a decline in bioprocessing sales.
Segment Profit Margins Mobile Solutions pretax profit margin was 19.1%, up 80 basis points year-over-year. Industrial Solutions pretax margin was 20.9%, up 80 basis points. Life Sciences pretax margin improved to 5.3% from a negative 1.2% a year ago.
Purexa membrane chromatography products: Introduced the first manufacturing-grade product within the Purexa portfolio to support GMP processes, enhancing productivity with high dynamic binding capacity, fast cycle times, and efficient scalability.
Connected solutions: Increased the number of connected machines and facilities, with plans to grow connected machines by over 30% in fiscal 2026.
New service acquisition: Acquired RPS Associates of New England, adding expertise in dust collection services and expanding geographic footprint.
Mobile Solutions in China: Sales grew 14% year-over-year, marking the fourth consecutive quarter of growth, with new hydraulics program wins in the agriculture market.
Partnership with Mighty Distributing System of America: Signed a new partnership making Donaldson the sole heavy-duty filtration supplier for Donaldson-branded products.
Footprint optimization and cost reduction: Progressed on footprint and cost optimization initiatives, expected to be mostly complete by the second half of fiscal 2026.
Expense management: Improved operating expense as a rate of sales to 18.3% from 19.9% year-over-year.
R&D and capital investments: Invested in solvent recovery, new disk drive technologies, and air and alternative fuel filtration to cement leadership in filtration technology.
M&A focus: Actively pursuing opportunities in Life Sciences and Industrial businesses, with disciplined criteria for strategic and financial alignment.
Tariff-related inflation and LIFO accounting impact: The company experienced significant costs due to tariff-related inflation, impacting LIFO inventory valuation. This inflationary environment has led to higher costs, which could affect gross margins and profitability.
Macroeconomic uncertainty and cyclical headwinds: The company faced challenges from macroeconomic uncertainty and cyclical headwinds, which could impact demand and operational stability.
On-Road sales decline: On-Road sales declined by 20% due to cyclical declines in global truck production, which could affect revenue in this segment.
Bioprocessing sales decline: Bioprocessing sales declined, which could hinder growth in the Life Sciences segment despite investments in this area.
Heavy lift phase of footprint and cost optimization: The company is in the heavy lift phase of footprint and cost optimization initiatives, which could temporarily strain resources and operational efficiency.
Cautious outlook on China market: Despite growth in China, the company remains cautious about the overall market conditions, which could pose risks to sustained growth in the region.
Defense sales decline: Aerospace and Defense sales decreased by 6% due to the completion of large projects, which could impact future revenue in this segment.
Fiscal 2026 Sales: Forecasted to reach $3.8 billion, representing a 1% to 5% increase year-over-year, with growth expected across all segments.
Operating Margin: Projected to achieve a record level of 16.1% to 16.7%, with a midpoint improvement of 70 basis points year-over-year.
Earnings Per Share (EPS): Guidance set at $3.92 to $4.08, with a midpoint of $4 per share, reflecting 9% growth on 3% sales growth.
Mobile Solutions Sales: Expected to be flat to up 4%, with Off-Road sales growing mid-single digits, On-Road sales increasing high single digits, and Aftermarket sales growing low single digits.
Industrial Solutions Sales: Forecasted to grow between 2% and 6%, driven by mid-single-digit increases in IFS and stable Aerospace and Defense sales.
Life Sciences Sales: Projected to grow between 1% and 5%, with momentum in Food and Beverage and Disk Drive businesses.
Connected Machines Growth: Anticipated to increase by over 30% in fiscal 2026, strengthening customer relationships and revenue streams.
Capital Expenditures: Planned investments of $65 million to $85 million in new products and technologies across all segments.
Cash Conversion: Expected to range between 85% and 95%, improving year-over-year and consistent with historical averages.
Share Repurchase: Forecasted to repurchase 2% to 3% of outstanding shares in fiscal 2026.
Dividend Increase: In fiscal 2025, Donaldson increased its dividend by 11%.
Dividend Aristocrat Status: Donaldson has increased its dividend annually for 30 consecutive years, maintaining its position in the S&P High-Yield Dividend Aristocrat Index.
Share Repurchase Program: In fiscal 2025, Donaldson returned $465 million to shareholders, largely through the repurchase of 4% of its outstanding shares.
Future Share Repurchase Plan: For fiscal 2026, Donaldson is forecasting a repurchase of 2% to 3% of its outstanding shares.
The earnings call summary reflects a generally positive outlook with strong financial performance, optimistic guidance, and strategic initiatives like footprint optimization and share repurchases. Despite some uncertainties in specific segments, the growth potential in key areas such as power generation and data centers, combined with a raised guidance, suggests a positive market reaction. The Q&A section reveals cautious optimism and confidence in overcoming challenges, supporting a positive sentiment.
The earnings call summary highlights positive financial performance, with improved margins across segments and an increase in dividends. The Q&A session reveals cautious optimism about growth, particularly in bioprocessing and aftermarket segments. While some uncertainties exist, such as muted bioprocessing growth and cautious demand in China, the overall sentiment is positive due to strong shareholder returns, margin expansion, and strategic focus on growth areas. The lack of market cap data prevents precise impact assessment, but the positive elements suggest a stock price increase in the short term.
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
