Donaldson Co. Inc. (DCI), a provider of technology-led filtration products and solutions, reported Tuesday weak profit in its third quarter on significant charges, despite higher net sales. However, adjusted earnings and top line beat the market estimates. Further, the company updated its fiscal 2025 adjusted earnings outlook above the Street view.
Tod Carpenter, chairman, president and chief executive officer, said, "For the full year, we expect to generate record sales and adjusted earnings. Importantly, our region-for-region footprint combined with the speed of decision making following our organizational redesign contribute to our expectation that the net impact on earnings from current tariffs will be immaterial."
For fiscal 2025, the company now expects adjusted earnings per share between $3.64 and $3.70, the midpoint of which is $0.03 above prior guidance.
The Wall Street analysts on average expect the company to report earnings of $3.60 per share. Analysts' estimates typically exclude special items.
The outlook excludes $0.56 of year-to-date non-GAAP charges and gains.
Fiscal 2024 earnings, on a reported and adjusted basis, were $3.38 and $3.42, respectively.
Sales are now forecast to increase 1 percent to 3 percent year over year, consistent with previous expectations. Pricing is expected to contribute one percentage point of the increase.
Mobile sales are projected to be flat to up 2 percent versus prior year. Industrial sales are forecast to increase between 2 percent and 4 percent and life sciences sales are projected to grow high-single digits.
Adjusted 2025 operating margin is expected to improve to between 15.6 percent and 16.0 percent.
For the full year, Donaldson anticipates repurchasing between 3.5 percent and 4.0 percent of its shares outstanding.
In the third quarter, net earnings fell 49.1 percent to $57.8 million from last year's $113.5 million. Earnings per share were $0.48, down 48 percent from $0.92 a year ago.
The latest results included $65.8 million of pre-tax, non-recurring net charges, including $62.0 million for the impairment of certain intangible assets for two upstream bioprocessing businesses.
Adjusted net earnings were $118.9 million or $0.99 per share in the quarter
Net sales grew 1.3 percent to $940.1 million from prior year's $927.9 million.
Analysts expected the company to report earnings of $0.95 per share on sales of $933.45 million.
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