Donaldson (DCI) Reports Record Sales and Earnings

Donaldson Company, Inc. has reported its third-quarter fiscal year 2024 results, showcasing record-breaking sales and earnings. The company's sales increased by 6.0% year over year to $927.9 million, and its earnings per share (EPS) saw a significant rise of 21.7% compared to 2023. The GAAP net earnings for the third quarter of 2024 were $113.5 million, representing a notable increase from the $93.7 million reported in fiscal 2023.

The company's operating results demonstrate the following changes in sales for the third quarter of 2024 compared to the same period in 2023:

  • Mobile Solutions Segment: Aftermarket sales increased by 10.9%, while on-road and off-road sales decreased by 6.0% and 9.8% respectively.
  • Industrial Solutions Segment: Industrial filtration solutions (IFS) sales grew by 2.4%, and aerospace and defense sales increased by 5.9%.
  • Life Sciences Segment: Sales surged by 24.2%, driven by strong volume growth resulting from bioprocessing equipment sales timing and disk drive.

The gross margin for the third quarter of 2024 was reported at 35.6%, marking a notable increase of 260 basis points from 33.0% in 2023. Operating expenses as a percentage of sales increased to 20.1%, mainly due to increased hiring and investments in the scaling of acquired life sciences businesses. The operating margin also saw an increase, rising to 15.5% from 14.2% in 2023.

Donaldson's year-to-date activities included paying $90.3 million in dividends and repurchasing 1.5% of its outstanding shares for $114.0 million.

As for the updated fiscal 2024 outlook, the company has raised its full-year EPS guidance to be between $3.33 and $3.39, up from the previous range of $3.24 to $3.32. Sales are expected to increase between 4% and 6% year over year, with a pricing benefit of approximately 2% and a negligible impact from currency translation.

Looking ahead, Donaldson anticipates repurchasing approximately 2% of its shares outstanding for the full year and forecasts a fiscal 2024 effective income tax rate of between 23% and 24%.

The company's performance demonstrates its resilience and ability to navigate through mixed end-market conditions, as it continues to focus on delivering technology-led filtration products and services across its diversified portfolio of businesses. Following these announcements, the company's shares moved 1.5%, and are now trading at a price of $73.02. Check out the company's full 8-K submission here.

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