Donaldson Company Reports Strong Fourth Quarter, Sets Record Fiscal Year 2025

Donaldson Company, Inc. (NYSE: DCI) has announced its fourth-quarter and full-year fiscal 2025 results, showing record sales and earnings. The company has also provided guidance for fiscal 2026, highlighting expectations for continued growth and profitability.

Donaldson Company, Inc. Reports Remarkable Results in Q4 FY’25

The fourth quarter of fiscal 2025 proved to be a remarkable period for Donaldson Company, Inc. (NYSE: DCI). The company reported sales of $981 million, marking a 4.8% increase compared to the same quarter in fiscal 2024. While the GAAP earnings per share (EPS) stood at $0.97, reflecting a 7.8% increase, the adjusted EPS rose by 9.6% to $1.03. These figures slightly surpassed the market expectations of an EPS of $1.02 and revenue of $953.79 million.

The company’s performance was driven by strategic initiatives that included footprint optimization and disciplined expense management. Despite facing challenges such as tariff-related inflation, Donaldson successfully increased its gross margin and operating income. The Mobile Solutions segment saw a 2.3% increase in sales, propelled by strong off-road and aftermarket sales, although on-road sales faced a decline. Meanwhile, the Industrial Solutions segment experienced a 7.7% growth, bolstered by demand in industrial filtration solutions and aerospace and defense sectors.

For the full fiscal year 2025, Donaldson achieved sales of $3.7 billion, a 2.9% increase from the previous year. The adjusted EPS for the year was $3.68, a 7.6% rise compared to fiscal 2024. The company returned approximately $465 million to shareholders through share repurchases and dividends, underlining its commitment to shareholder value. Despite a decrease in GAAP EPS by 9.8% to $3.05, the overall financial performance reflected a strong operational foundation.

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DCI Sets Ambitious Targets for Fiscal 2026

Looking ahead to fiscal 2026, Donaldson Company has set ambitious targets, projecting record sales of $3.8 billion and an EPS centered around $4.00. The guidance indicates an anticipated sales increase between 1% and 5%, with a pricing benefit contributing approximately 1% to this growth. The company aims to achieve an operating margin between 16.1% and 16.7%, building on the efficiency gains made in fiscal 2025.

The Mobile Solutions segment is expected to see sales growth ranging from flat to 4%, with off-road sales projected to rise in the mid-single digits and on-road sales anticipated to rebound with high-single-digit growth. Aftermarket sales are forecasted to grow at a low-single-digit rate, driven by market share gains and strong vehicle utilization rates. In the Industrial Solutions segment, sales are projected to grow between 2% and 6%, with strength expected across dust collection and power generation businesses.

The Life Sciences segment is forecasted to grow between 1% and 5%, supported by continued sales growth in food and beverage and disk drive sectors. Donaldson plans to maintain its focus on disciplined investments to drive growth across its segments while continuing its tradition of returning cash to shareholders through dividends and share repurchases. The company also anticipates a fiscal 2026 effective income tax rate between 23.5% and 25.5%, with capital expenditures projected to range from $65 million to $85 million.

Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.