Donaldson Company Inc. reported fiscal fourth-quarter adjusted earnings of $1.15 per share, exceeding analyst expectations of $1.13 and rising 12% year-over-year. Revenue reached $1.1 billion, topping forecasts of $1.04 billion and marking the first quarterly sales above $1 billion in the company’s history.
Operating margin expanded to 17.5%, a company record, while gross margin rose to 36.7%, both up significantly from the prior year. Segment performance showed broad-based growth, with Mobile Solutions revenue increasing 8% to $635 million, Industrial Solutions up 8% to $334 million, and Life Sciences rising 10% to $90 million. Mobile Solutions’ pre-tax margin reached a record 21.3%, up 220 basis points from a year ago.
For the full fiscal year 2026, Donaldson posted sales of $3.9 billion, up 5% from 2025, and adjusted EPS of $3.98, an 8% increase. Operating margin for the year hit 16%, another record, while the company returned $250 million to shareholders through dividends and buybacks. The board raised the dividend for the 30th consecutive year, maintaining payouts for 56 years.
Management provided fiscal 2027 guidance calling for sales growth of 5.5% to 9.5%, implying revenue of at least $4.1 billion. Adjusted EPS is projected between $4.22 and $4.38, with operating margin expected to expand to 16.9%. Free cash flow conversion is forecast at 95% to 105%, while capital expenditures are set at $70 million to $90 million.
Segment outlooks include mid-teens growth for Industrial Solutions, driven partly by the Facet Filtration acquisition, and 7% to 11% growth for Life Sciences. The second half of fiscal 2027 is anticipated to account for roughly 52% of sales and 57% of operating profit. The company has reduced Facet-related debt by more than $100 million and expects the unit to turn cash-accretive in fiscal 2027 after interest expenses.
Shares rose 2.79% in premarket trading to $95.86 following the results. The stock trades at a P/E ratio of 25.8, with a market capitalization of $11.17 billion. Donaldson’s net debt to EBITDA stands near 1.4x, while its debt-to-equity ratio is 0.36.
