Donaldson (DCI) Q3 Earnings & Revenues Beat, Guidance Raised
Zacks Investment Research | Jun 01, 2017 09:27PM ET
Donaldson Company, Inc. (NYSE:DCI) scored a hat-trick of earnings beats, as its third-quarter fiscal 2017 results surpassed estimates by a penny. The premium filtration products provider’s adjusted earnings per share of 45 cents beat the Zacks Consensus Estimate of 44 cents by 2.3%.
On a GAAP basis, the bottom-line figure of 45 cents was up 4.6% from 43 cents recorded in the prior-year quarter. Absence of pre-tax restructuring charges, sturdy top-line growth and streamlined operations proved conducive to the earnings performance.
Inside the Headlines
Donaldson reported total sales of $608.2 million, up 6.5% on a year-over-year basis. Also, revenues surpassed the Zacks Consensus Estimate of $579 million. Strong performance by the Engine Products segment drove the top line. The segment has been benefiting substantially from stabilization in market conditions and robust sales of replacement parts, resulting in overall top-line growth.
Revenues at the segment were up 13.5% year over year to $405.6 million. All the four sub-businesses within this segment – Aftermarket, Aerospace and Defense, and On Road and Off Road – grew on a year-over-year basis. Off-Road (up 27.5%), Aerospace and Defense (up 22.3%) and Aftermarket (11.1%) recorded double-digit growth. Meanwhile, On Road sub-segment (up 1.6%) returned to growth after a couple of sluggish quarters.
On the other hand, revenues at the Industrial Products segment declined 5.3% in fiscal 2017 to $202.6 million compared with the prior-year quarter. Lackluster performance by Gas Turbines Systems, which plunged 34.5% year over year, weighed on revenues. However, the Special Applications business, which was up 12.1%, offset this fall to some extent. Overall, sluggishness in first-fit demand, along with economic and geopolitical uncertainty, is hurting the profitability of this segment.
Donaldson’s adjusted operating margin expanded 70 basis points (bps) to 14.5% in the fiscal third quarter. In addition, the company’s Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) were $107.6 million, up from $96.7 million recorded a year ago.
Donaldson Company, Inc. Price, Consensus and EPS Surprise
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