Donaldson Q1 Profit Rises - Update

(RTTNews) - Donaldson Co. Inc. (DCI), which makes filtration and exhaust control products, Thursday said its profit for the first quarter increased from a year ago, helped mainly by a modest revenue growth and strong margins. Both earnings and revenues for the quarter topped analysts' expectations. The company also maintained its earnings and revenue forecast for the full-year 2014.

The Minneapolis, Minnesota-based company's profit for the first quarter rose to $61.59 million or $0.41 per share from $54.11 million or $0.36 per share a year ago.

Net earnings, excluding special items, for the quarter were $63.04 million or $0.42 per share. On average, eleven analysts polled by Thomson Reuters expected earnings of $0.39 per share for the quarter. Analysts' estimates typically exclude special items.

Donaldson said sales for the first quarter grew 2 percent to $599.38 million from $588.95 million in the prior-year period. Analysts had a consensus revenue estimate of $598.69 million for the quarter.

Commenting on the results, Chief Executive Bill Cook, said, "We had a good start to our new fiscal year as we delivered record operating results on a modest sales increase in our first quarter. We believe that many of our first-fit equipment end markets have stabilized, while demand for our replacement filters continues to grow."

Engine products' sales increased 7 percent in local currency from last year, while industrial products' sales decreased 4 percent in local currency.

First-quarter gross margin rose to 35.8 percent from 33.7 percent last year, attributable to improved fixed cost absorption and positive mix impacts from higher aftermarket sales.

Operating expenses, a percent of sales, dropped to 20.5 percent from last year 21.2 percent.

Looking forward to the fiscal year 2014, Donaldson maintained its earnings outlook in the range of $1.65 to $1.85 per share and sales of $2.45 billion to $2.55 billion. Analysts currently expect earnings of $1.77 per share on revenue of $2.51 billion for the year.

DCI is currently trading at $40.79, up $1.62 or 4.14%, on the NYSE.