(RTTNews) - Filtration systems maker Donaldson Company, Inc. (DCI: News ), Wednesday reported a 27% decline in profit for the first quarter, mainly due to a 25% decline in sales across segments, reflecting weaker demand. Earnings for the quarter, however, came in well ahead of Street expectations, as did revenues. Looking ahead, the company lifted its full year outlook, indicated to come in above analysts' estimates. Donaldson shares gained over 7% in after hours trade following the announcement of results.

Donaldson's net income for the quarter declined 27.9% to $34.56 million from $47.96 million year-ago. Earnings per share declined by 26.7% to $0.44 per share from $0.60 per share in the prior year period.

Excluding the impact of restructuring expenses, the company reported net income of $35.4 million or $0.45 per share for the quarter.

Nine analysts polled by Thomson Reuters estimated earnings of $0.34 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter declined 25.3% to $428.08 million from $573.26 million during the comparable period a year-ago. Six Wall Street analysts estimated revenue of $423.18 million for the quarter.

Segment-wise, net sales from the total Engine Products segment declined to $243.97 million from $308.77 million in the year-ago period.

Net sales from the total Industrial Products segment dropped to $184.10 million from $264.48 million in the year-ago period.
Donaldson said that the impact of foreign currency translation increased reported sales by $6.6 million, or 1.2% and reported net earnings by $0.1 million, or 0.2%.

According to Bill Cook, chairman, president and chief executive officer, said the company's operating margin increased to 12.3% from 12.2% a year-ago, essentially benefiting from savings generated by restructuring actions, ongoing cost reduction activities, and improved distribution efficiencies. These savings helped offset lower absorption of fixed costs in the manufacturing plants. Donaldson's sales mix also helped deliver improved margins as the total replacement filter sales exceeded its first-fit sales for the first time.

Donaldson's cost of sales for the quarter declined to $279.68 million from $386.55 million in the comparable period year-ago.

Operating expenses declined to $95.95 million from $117.01 million in the prior year period. The majority of the decrease was driven by $14.6 million in savings from previous restructuring actions while incurring an additional $0.5 million in restructuring costs in the quarter.

To receive FREE breaking news email alerts for Donaldson Company Inc. and others in your portfolio

 1   2   Next Page