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Donaldson Maintains Sales, Earnings Guidance For FY20 - Quick Facts

Donaldson Company, Inc. (DCI) announced the company's current guidance for fiscal 2020 sales, operating profit, earnings per share and capital deployment is consistent with prior guidance. Donaldson expects fiscal 2020 GAAP earnings per share between $2.21 and $2.37. Analysts polled by Thomson Reuters expect the company to report profit per share of $2.26. Analysts' estimates typically exclude special items.

Donaldson expects fiscal 2020 operating margin between 13.9 and 14.5 percent, compared with 13.6 percent in 2019. The company said the projected year-over-year improvement is due to higher gross margin, partially offset by a higher operating expense rate.

Donaldson projects fiscal 2020 sales in a range between a 2 percent decline and a 4 percent increase, including a negative impact from currency translation of 1 to 2 percent. Engine sales are projected in a range between a 4 percent decline and a 2 percent increase, reflecting growth in Aerospace and Defense and Aftermarket, combined with lower year-over-year sales in the first-fit On-Road and Off-Road businesses. Industrial sales are expected to increase between 2 and 8 percent, for fiscal 2020.

For the first quarter, earnings per share was $0.51, compared to $0.56, last year. On average, four analysts polled by Thomson Reuters expected the company to report profit per share of $0.53, for the quarter. Analysts' estimates typically exclude special items.

First-quarter operating margin was 13.2 percent, compared with 14.1 percent, a year ago. The company said the year-over change in operating margin reflects higher expense rate, partially offset by higher gross margin. Gross margin increased 0.4 percentage points to 34.4 percent from 34.0 percent, last year.

First quarter sales declined 4.1 percent to $672.7 million from $701.4 million, a year ago. Sales of Engine Products decreased 4.5 percent, or 3.1 percent excluding the impact from currency translation. Sales of Industrial Products declined 3.2 percent, or 2.0 percent excluding the impact from currency translation. Analysts expected revenue of $699.32 million, for the quarter.

Tod Carpenter, CEO said: "As expected, demand in the first quarter was uneven. The market for new equipment was soft, sales of replacement parts were more stable, and growth businesses like Process Filtration were up notably from last year."

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