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DCI posted Q1 EPS of $0.94 and $935.4M revenue, up year over year and above consensus estimates.
Mobile Solutions rose 4.5% and Life Sciences jumped 13.1%, while Industrial Solutions was flat overall.
DCI guides FY26 EPS of $3.95-$4.11 with 1-5% sales growth and strong free cash flow conversion.
Donaldson Company, Inc. (DCI - Free Report) reported first-quarter fiscal 2026 (ended Sept. 30, 2025) adjusted earnings of 94 cents per share, which beat the Zacks Consensus Estimate of 93 cents. The bottom line increased 13.3% year over year.
DCI’s Revenue Results
Total revenues of $935.4 million beat the Zacks Consensus Estimate of $924 million. The top line increased 3.9% year over year (up 2.6% at constant currency).
Region-wise, Donaldson’s net sales in the United States/Canada decreased 0.6% year over year. The metric increased 9.1% year over year in Europe, the Middle East and Africa, and increased 5.9% in Latin America. Also, net sales in the Asia Pacific improved 6.6%.
Donaldson reports revenues under three segments, namely Mobile Solutions, Industrial Solutions and Life Sciences.
A brief snapshot of segmental sales is provided below.
The Mobile Solutions segment’s (accounting for 64% of net sales) sales were $598.3 million, indicating a year-over-year increase of 4.5%. Sales rose 6.1% in Off-Road and decreased 27.1% in On-Road businesses during the quarter. Aftermarket sales improved 6.5% year over year.
Revenues generated from the Industrial Solutions segment (27.6%) were $257.8 million, up 0.1% year over year. Industrial Filtration Solutions' sales increased 1.6% year over year. Sales decline of 7.1% in the Aerospace and Defense businesses affected the results.
Revenues generated from the Life Sciences segment (8.4%) were $79.3 million, up 13.1% year over year. The results benefited from an increase in new equipment and replacement part sales in the food and beverage business.
Donaldson Company, Inc. Price, Consensus and EPS Surprise
In the fiscal first quarter, Donaldson’s cost of sales increased 4.5% year over year to $606.6 million. Gross profit increased 2.9% to $328.8 million. The gross margin of 35.2% declined 30 basis points, due to tariff-related inflation and related inventory valuation headwinds.
Operating expenses declined 4.9% year over year to $179.5 million. Operating profit increased 14.2% to $149.3 million. The operating margin was 16%, up 150 bps year over year.
The effective tax rate was 22.8% compared with 24.2% in the year-ago quarter.
Balance Sheet & Cash Flow of DCI
Exiting the fiscal first quarter, Donaldson’s cash and cash equivalents were $210.7 million compared with $180.4 million in the fourth quarter of fiscal 2025. Long-term debt was $671.5 million compared with $630.4 million in the fourth quarter of fiscal 2025.
In first three months of fiscal 2026, the company generated net cash of $125.4 million from operating activities, indicating an increase of 72% year over year. Capital expenditure (net) totaled $3.4 million compared with $25 million in the year-ago fiscal period. Free cash flow increased 154.7% to $122 million.
It used $91.9 million to repurchase stocks and $34.7 million to pay out dividends during the first three months of fiscal 2026.
Donaldson’s FY26 Outlook
For fiscal 2026 (ending July 2026), Donaldson expects adjusted earnings per share (EPS) to be in the range of $3.95-$4.11 compared with $3.68 in fiscal 2025. Sales are anticipated to increase 1- 5% from the fiscal 2025 level. Positive pricing is projected to have an accretive impact of 1%.
On a segmental basis, Mobile Solutions’ sales are expected to be flat to increase 4% from the fiscal 2025 level. Industrial Solutions’ sales are envisioned to jump in the range of 2-6% from the year-ago figure. The company forecasts its Life Sciences segment’s sales to increase in the 1-5% range.
Interest expenses are predicted to be approximately $24 million, while other income is projected to be in the range of $14-$18 million. The effective tax rate is anticipated to be between 23.5% and 25.5%.
Capital expenditure is expected to be between $65 million and $85 million. Free cash flow conversion is anticipated to be in the range of 85-95%. Donaldson expects to repurchase 2-3% of its outstanding shares during the fiscal year.
Flowserve Corporation (FLS - Free Report) presently carries a Zacks Rank #2 (Buy). FLS’ earnings surpassed the consensus estimate thrice and missed once in the trailing four quarters. The average earnings surprise was 10.5%. In the past 60 days, the Zacks Consensus Estimate for Flowserve’s 2025 earnings has increased 2.9%.
Trimble Inc. (TRMB - Free Report) presently carries a Zacks Rank of 2. TRMB’s earnings surpassed the consensus estimate in each of the trailing four quarters. The average earnings surprise was 7.4%. In the past 60 days, the Zacks Consensus Estimate for Trimble’s 2025 earnings has increased 3.3%.
Crane Company (CR - Free Report) currently carries a Zacks Rank of 2. CR has an impressive earnings surprise history, having outperformed the consensus estimate in each of the preceding four quarters, with an average surprise of 9.3%. In the past 60 days, the Zacks Consensus Estimate for Crane’s 2025 earnings has increased 2.9%.
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Donaldson's Q1 Earnings & Revenues Beat Estimates, Increase Y/Y
Key Takeaways
Donaldson Company, Inc. (DCI - Free Report) reported first-quarter fiscal 2026 (ended Sept. 30, 2025) adjusted earnings of 94 cents per share, which beat the Zacks Consensus Estimate of 93 cents. The bottom line increased 13.3% year over year.
DCI’s Revenue Results
Total revenues of $935.4 million beat the Zacks Consensus Estimate of $924 million. The top line increased 3.9% year over year (up 2.6% at constant currency).
Region-wise, Donaldson’s net sales in the United States/Canada decreased 0.6% year over year. The metric increased 9.1% year over year in Europe, the Middle East and Africa, and increased 5.9% in Latin America. Also, net sales in the Asia Pacific improved 6.6%.
Donaldson reports revenues under three segments, namely Mobile Solutions, Industrial Solutions and Life Sciences.
A brief snapshot of segmental sales is provided below.
The Mobile Solutions segment’s (accounting for 64% of net sales) sales were $598.3 million, indicating a year-over-year increase of 4.5%. Sales rose 6.1% in Off-Road and decreased 27.1% in On-Road businesses during the quarter. Aftermarket sales improved 6.5% year over year.
Revenues generated from the Industrial Solutions segment (27.6%) were $257.8 million, up 0.1% year over year. Industrial Filtration Solutions' sales increased 1.6% year over year. Sales decline of 7.1% in the Aerospace and Defense businesses affected the results.
Revenues generated from the Life Sciences segment (8.4%) were $79.3 million, up 13.1% year over year. The results benefited from an increase in new equipment and replacement part sales in the food and beverage business.
Donaldson Company, Inc. Price, Consensus and EPS Surprise
Donaldson Company, Inc. price-consensus-eps-surprise-chart | Donaldson Company, Inc. Quote
Donaldson’s Margin Profile
In the fiscal first quarter, Donaldson’s cost of sales increased 4.5% year over year to $606.6 million. Gross profit increased 2.9% to $328.8 million. The gross margin of 35.2% declined 30 basis points, due to tariff-related inflation and related inventory valuation headwinds.
Operating expenses declined 4.9% year over year to $179.5 million. Operating profit increased 14.2% to $149.3 million. The operating margin was 16%, up 150 bps year over year.
The effective tax rate was 22.8% compared with 24.2% in the year-ago quarter.
Balance Sheet & Cash Flow of DCI
Exiting the fiscal first quarter, Donaldson’s cash and cash equivalents were $210.7 million compared with $180.4 million in the fourth quarter of fiscal 2025. Long-term debt was $671.5 million compared with $630.4 million in the fourth quarter of fiscal 2025.
In first three months of fiscal 2026, the company generated net cash of $125.4 million from operating activities, indicating an increase of 72% year over year. Capital expenditure (net) totaled $3.4 million compared with $25 million in the year-ago fiscal period. Free cash flow increased 154.7% to $122 million.
It used $91.9 million to repurchase stocks and $34.7 million to pay out dividends during the first three months of fiscal 2026.
Donaldson’s FY26 Outlook
For fiscal 2026 (ending July 2026), Donaldson expects adjusted earnings per share (EPS) to be in the range of $3.95-$4.11 compared with $3.68 in fiscal 2025. Sales are anticipated to increase 1- 5% from the fiscal 2025 level. Positive pricing is projected to have an accretive impact of 1%.
On a segmental basis, Mobile Solutions’ sales are expected to be flat to increase 4% from the fiscal 2025 level. Industrial Solutions’ sales are envisioned to jump in the range of 2-6% from the year-ago figure. The company forecasts its Life Sciences segment’s sales to increase in the 1-5% range.
Interest expenses are predicted to be approximately $24 million, while other income is projected to be in the range of $14-$18 million. The effective tax rate is anticipated to be between 23.5% and 25.5%.
Capital expenditure is expected to be between $65 million and $85 million. Free cash flow conversion is anticipated to be in the range of 85-95%. Donaldson expects to repurchase 2-3% of its outstanding shares during the fiscal year.
DCI’s Zacks Rank
The company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Flowserve Corporation (FLS - Free Report) presently carries a Zacks Rank #2 (Buy). FLS’ earnings surpassed the consensus estimate thrice and missed once in the trailing four quarters. The average earnings surprise was 10.5%. In the past 60 days, the Zacks Consensus Estimate for Flowserve’s 2025 earnings has increased 2.9%.
Trimble Inc. (TRMB - Free Report) presently carries a Zacks Rank of 2. TRMB’s earnings surpassed the consensus estimate in each of the trailing four quarters. The average earnings surprise was 7.4%. In the past 60 days, the Zacks Consensus Estimate for Trimble’s 2025 earnings has increased 3.3%.
Crane Company (CR - Free Report) currently carries a Zacks Rank of 2. CR has an impressive earnings surprise history, having outperformed the consensus estimate in each of the preceding four quarters, with an average surprise of 9.3%. In the past 60 days, the Zacks Consensus Estimate for Crane’s 2025 earnings has increased 2.9%.