Donaldson reported third-quarter fiscal 2026 sales of $995.1 million, up 5.8% from a year ago and a company record. On a constant-currency basis, sales rose 3.1%.
Net earnings climbed to $118.1 million from $57.8 million in the prior-year quarter. Diluted earnings per share increased to $1.00 from $0.48.
Adjusted net earnings were $125.5 million, up from $118.9 million, and adjusted diluted EPS rose to $1.06 from $0.99, a 7.1% increase. Adjusted operating margin reached 16.6%, up 30 basis points from 16.3% a year earlier and the highest on record. Reported operating margin was 15.6%, compared with 9.3% in the prior-year quarter.
Gross margin was 33.5%, down from 34.2%. Adjusted gross margin was 34.4%, down 10 basis points from 34.5%.
Operating expenses fell sharply as a share of sales to 17.9% from 24.9%. On an adjusted basis, operating expenses were 17.8% of sales, compared with 18.2%.
Interest expense rose to $6.5 million from $5.7 million. Other income increased to $6.0 million from $5.3 million. The effective tax rate improved to 23.7% from 33.6%.
By segment, mobile solutions sales rose 8.1% to a gain driven by higher volumes, pricing and currency. Off-road sales increased 8.8%, on-road sales rose 5.2%, and aftermarket sales climbed 8.1%.
Industrial solutions sales slipped 0.6%. Industrial filtration solutions sales increased 2.3%, while aerospace and defense sales fell 13.5%.
Life sciences sales advanced 12.7%.
For the first nine months of fiscal 2026, sales were up 4.3% reported and 1.9% in constant currency. Mobile solutions sales rose 4.8%, industrial solutions sales increased 0.6%, and life sciences sales grew 14.0%.
Year to date, Donaldson paid $104.0 million in dividends and repurchased 1.2% of shares outstanding for $108.5 million.
The company completed its $829 million all-cash acquisition of Facet on May 4. Management said the deal will add about $25 million to $30 million of sales in fiscal 2026 and dilute EPS by about $0.03.
Donaldson narrowed its full-year outlook. Organic sales are now expected to rise 3% to 5%, versus a prior range of 1% to 5%. Organic adjusted EPS is projected at $3.94 to $4.01, up 7% to 9% from fiscal 2025 adjusted EPS of $3.68. Adjusted operating margin is now expected to be 15.8% to 16.2%, versus prior guidance of 16.0% to 16.4% and above last year’s adjusted 15.7%. As a result of these announcements, the company's shares have moved 0.1% on the market, and are now trading at a price of $81.95. If you want to know more, read the company's complete 8-K report here.
