Donaldson Company, Inc. (NYSE:DCI) stock rose Thursday after the company reported first-quarter fiscal 2026 results.
Sales rose 3.9% year over year (Y/Y) to $935.4 million, beating the consensus of $922.9 million, led by favorable currency translation and volume growth.
GAAP net earnings increased to $113.9 million (or 97 cents per share) from $99.0 million (or 81 cents per share) in the prior year.
This increase was primarily due to a pre-tax, non-recurring net benefit of $4.3 million.
Gross margin stood at 35.2% in the quarter compared to 35.5% a year ago quarter, on higher operating costs. Adjusted gross margin came in at 35.4% compared with 35.6% in the prior year quarter.
The company reported adjusted EPS of 94 cents, beating the consensus of 92 cents.
In the quarter, Donaldson spent $34.7 million in dividends and bought back shares worth $91.9 million.
Segment Details
By Segment, Mobile Solutions sales grew 4.5% Y/Y due to higher volumes, pricing, and currency translation. Aftermarket sales increased 6.5% Y/Y, aided by strong OE channel demand and independent channel market share gains.
Industrial Solutions segment sales remained almost flat Y/Y, thanks to strong pricing growth and positive currency translation, while Aerospace and Defense sales declined 7.1% Y/Y, on soft Defense sales.
Life Sciences segment sales increased 13.1% Y/Y, led by strong new equipment sales in Food and Beverage and Disk Drive.
Outlook
Donaldson raised its fiscal 2026 guidance for adjusted EPS to $3.95-$4.11 (versus consensus of $4.01) from the previous range of $3.92-$4.08.
The company revised sales growth to be up 1%-5% year over year (versus earlier guidance of 1%-3%), with a pricing benefit of around one percentage point.
Donaldson projects mobile sales growth to be flat to up 4%, Industrial sales growth of 2%-6%, and Life Sciences sales to increase in the 1% and 5% range.
For the full year, Donaldson anticipates repurchasing approximately 2.0% and 3.0% of its shares outstanding.
Management Commentary
Tod Carpenter, chairman, president, and chief executive officer, said, “In the face of a dynamic macro landscape, and consistent with the value created by our robust portfolio of businesses and product offerings, we gained market share in key businesses and grew replacement part sales through our razor-to-sell-razorblades model. Combined with ongoing expense management, we converted sales growth of 4% into 13% adjusted EPS growth.”
DCI Price Action: Donaldson shares were up 2.67% at $89.94 during premarket trading on Wednesday. The stock is trading near its 52-week high of $90.94, according to Benzinga Pro data.
Read Next:
Photo by T. Schneider via Shutterstock
