Donaldson Company Stock Earnings Reports

Donaldson delivered a resilient Q3: sales of $940M (+1% YoY) and adjusted EPS of $0.99 (+~8% YoY) with operating margin up ~80 bps. Management reiterated full‑year fiscal 2025 guidance of record sales, record operating margin (15.6%–16.0%) and record adjusted EPS ($3.64–$3.70, midpoint up $0.03), and expects full‑year sales +1% to +3%. Segment highlights: Mobile Solutions stable with aftermarket strength (aftermarket ≈75%–80% of segment; China +27%); Industrial Solutions revenue +5% with IFS profit back above 18% and aerospace & defense at an all‑time high; Life Sciences +1% with strong legacy businesses offset by weakness and timing in bioprocessing. Management took a $62M pre‑tax impairment on two upstream bioprocessing businesses (Univercells Technologies and Solaris) but says it will continue selective investments in bioprocessing; other one‑time items include $4.2M restructuring. Capital deployment remains shareholder friendly: $192M of buybacks in Q3 (2.4% of shares) and an announced 11% dividend increase; full‑year buyback target raised to 3.5%–4.0% of shares. Other financial notes: gross margin down ~110 bps (34.5%) due mainly to higher manufacturing costs and footprint optimization activity (heavy lift through end of calendar year), capex guidance $75M–$90M, and expected cash conversion 80%–90%. Tariff exposure is described as manageable (~$35M annualized, <1% of sales) and largely offsettable by pricing and supply adjustments.