Donaldson Q2 EPS Misses by $0.07 as Revenue Climbs 3% to $896M
Donaldson reported Q2 adjusted EPS of $0.83, missing estimates by $0.07 while revenue rose 3% year over year to $896.3 million. Gross margin declined 170 basis points to 33.5% and Life Sciences led segment growth with a 16.2% sales increase.
1. Q2 Financial Results
Donaldson reported adjusted earnings of $0.83 per share in its fiscal second quarter, falling short of the $0.90 consensus estimate and remaining flat year over year. Total revenues increased 3% to $896.3 million, slightly below the $898 million consensus forecast.
2. Profitability and Margins
Cost of sales rose 5.7% to $596.5 million, driving gross profit down 2% to $299.8 million and pushing the gross margin down 170 basis points to 33.5%. Operating expenses increased 0.5% to $181.1 million, resulting in an operating margin of 13.2%, down 120 basis points year over year.
3. Sales by Segment and Region
Mobile Solutions generated $556.6 million in sales, up 1.6%, with Off-Road up 7.8% and On-Road down 9.2%. Industrial Solutions sales rose 2.4% to $259.7 million, while Life Sciences led with $80 million, up 16.2%. Regionally, US/Canada sales fell 4.7%, EMEA surged 16%, Latin America declined 5.2% and Asia Pacific rose 8.7%.
4. Fiscal 2026 Outlook
For fiscal 2026, Donaldson expects adjusted EPS of $3.93–$4.01 versus $3.68 last year and anticipates sales growth of 1–5%. The company forecasts capital expenditures of $60–$75 million, free cash flow conversion of 85–95% and plans to repurchase 1.2% of outstanding shares.