Donaldson Q2 Profit Rises, Revenue Slides - Update

(RTTNews) - Filtration systems provider Donaldson Co. Inc. (DCI) Friday reported increased profit for the second quarter, helped by lower cost of sales as well as taxes, even as revenues slid from last year. The company backed its full year expectations.

Net earnings rose to $58.34 million or $0.39 per share from last year's $50.81 million or $0.34 per share. On average, 11 analysts polled by Thomson Reuters expected earnings per share of $0.36 for the quarter. Analysts' estimates typically exclude one-time items.

Revenues fell 2 percent to to $581.62 million from $596.04 million and missed consensus estimates of $597.94 million. The impact of foreign currency translation lowered sales by 1.5 percent.

Cost of sales declined to $379.97 million from $397.06 million, leading to higher gross profit. Additionally income taxes also fell from last year, benefiting the bottom line.

Bill Cook, Donaldson's CEO, said, ''We delivered record net earnings in our second quarter. We see stabilization within many of our OEM first-fit equipment end markets and increasing demand for our replacement filters.''

Engine Products' sales increased 7 percent in local currency, driven by an 11 percent increase in Engine Aftermarket sales and a 10 percent increase in OEM sales outside the U.S.

Industrial Products' sales decreased 12 percent in local currency due to a 50 percent decrease in Gas Turbine sales from last year's record figures.

For fiscal 2014, Donaldson expects earnings per share between $1.65 and $1.85, and sales to be between $2.45 and $2.55 billion, or an increase of 1 to 5 percent including the negative impact of foreign currency exchanges rates.

Analysts expect the company to report fiscal 2014 earnings per share of $1.78 on $2.51 billion in revenue.

The stock closed up 1.4 percent at $42.65 on Thursday.