On June 4, 2024, Donaldson Co Inc (DCI, Financial) released its 8-K filing reporting record third quarter fiscal year 2024 sales and earnings. Donaldson, a leading manufacturer of filtration systems and replacement parts, serves diverse end markets including construction, mining, agriculture, truck, and industrial. The company operates through three segments: mobile solutions, industrial solutions, and life sciences.
Performance Overview
Donaldson Co Inc (DCI, Financial) reported third quarter sales of $927.9 million, a 6.0% increase compared to the same period in 2023. The company achieved a GAAP net earnings of $113.5 million, up from $93.7 million in the previous year. Earnings per share (EPS) for the quarter were $0.92, surpassing the analyst estimate of $0.84 and reflecting a 21.7% increase year-over-year.
"The Donaldson team delivered outstanding performance in the third quarter, generating record sales and earnings with robust margins, while continuing to set a stronger foundation for future profitable growth through ongoing strategic investments," said Tod Carpenter, chairman, president, and chief executive officer.
Segment Performance
The Mobile Solutions segment saw a 5.5% increase in sales, driven by higher volumes and pricing. Aftermarket sales rose by 10.9%, while On-Road and Off-Road sales declined by 6.0% and 9.8%, respectively, due to a decrease in global equipment production.
The Industrial Solutions segment experienced a 2.9% increase in sales, supported by volume growth and pricing. Aerospace and Defense sales grew by 5.9%, and Industrial Filtration Solutions (IFS) sales increased by 2.4%.
The Life Sciences segment reported a significant 24.2% increase in sales, attributed to strong volume growth from Bioprocessing Equipment sales timing and Disk Drive.
Financial Achievements
Donaldson Co Inc (DCI, Financial) achieved a gross margin of 35.6%, up 260 basis points from 33.0% in 2023, driven by leverage on higher sales, pricing benefits, and input cost deflation. Operating expenses as a percentage of sales increased to 20.1% from 18.8% in the prior year, due to increased hiring and investments in the scaling of acquired Life Sciences businesses. Operating income as a percentage of sales (operating margin) rose to 15.5%, up 130 basis points year-over-year.
Income Statement Highlights
| Metric | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Net Sales | $927.9 million | $875.7 million | 6.0% |
| Gross Profit | $330.1 million | $288.8 million | 14.3% |
| Operating Income | $143.6 million | $124.0 million | 15.8% |
| Net Earnings | $113.5 million | $93.7 million | 21.1% |
| EPS (Diluted) | $0.92 | $0.76 | 21.7% |
Balance Sheet and Cash Flow
Donaldson Co Inc (DCI, Financial) reported total assets of $2.87 billion as of April 30, 2024, compared to $2.77 billion as of July 31, 2023. The company maintained a strong cash position with $223.7 million in cash and cash equivalents. Year-to-date, Donaldson paid $90.3 million in dividends and repurchased 1.5% of its outstanding shares for $114.0 million.
Updated Fiscal 2024 Outlook
Donaldson Co Inc (DCI, Financial) has raised its full-year EPS guidance to between $3.33 and $3.39, up from the prior guidance of $3.24 to $3.32. Sales are expected to increase between 4% and 6% year-over-year. The company anticipates continued growth in its Mobile, Industrial, and Life Sciences segments, with specific forecasts for each segment provided in the filing.
For more detailed information, readers can access the full 8-K filing.
Explore the complete 8-K earnings release (here) from Donaldson Co Inc for further details.
