Donaldson Company (NYSE:DCI) traded higher in premarket activity on Tuesday after reporting third-quarter results that exceeded analyst forecasts on both earnings and revenue, supported by strong performances in its Mobile Solutions and Life Sciences businesses.
Shares of the filtration technology manufacturer gained nearly 4% following the release.
Revenue and Earnings Come in Ahead of Forecasts
For the quarter, Donaldson reported adjusted earnings of $1.06 per share, slightly ahead of the consensus estimate of $1.05.
Revenue reached $995.1 million, surpassing analyst expectations of $974.25 million and representing a 5.8% increase from $940.1 million in the corresponding period a year earlier.
The company also delivered a record adjusted operating margin of 16.6%, an improvement of 30 basis points compared with the third quarter of fiscal 2025.
Record Performance Across Key Metrics
Management highlighted the quarter as one of the strongest in the company’s history, citing record sales, profitability and earnings.
“Third quarter results marked a significant sequential step-up in performance, including all-time high sales, adjusted operating margin and adjusted earnings,” said Rich Lewis, president and chief executive officer.
Lewis noted that growth in several business units helped offset challenges elsewhere in the portfolio.
“Strong performance in our Mobile and Life Sciences segments more than offset near-term operating headwinds in the Industrial segment, demonstrating the benefit of our diversified portfolio of businesses,” he added.
Mobile Solutions and Life Sciences Lead Growth
The Mobile Solutions division was the primary growth driver during the quarter, with sales increasing 8.1% year over year.
Within the segment, Off-Road sales rose 8.8%, while Aftermarket revenue advanced 8.1%.
The Life Sciences business also posted robust results, with sales climbing 12.7% from the prior-year period.
By contrast, revenue within the Industrial Solutions segment slipped 0.6%, reflecting ongoing operating challenges that partially offset gains elsewhere.
Full-Year Guidance Maintained Around Consensus
Donaldson updated its outlook for fiscal 2026, narrowing its adjusted earnings-per-share guidance range to between $3.94 and $4.01.
The midpoint of $3.98 aligns with current Wall Street expectations.
The forecast excludes approximately $0.03 per share of dilution associated with the company’s recently completed acquisition of Facet Filtration.
Management continues to expect organic sales growth of between 3% and 5% for the full fiscal year.
Facet Acquisition Expected to Support Future Growth
Earlier this year, Donaldson completed its acquisition of Facet Filtration in a transaction valued at approximately $829 million.
The deal closed on May 4, 2026, and is expected to contribute between $25 million and $30 million in revenue during the fourth quarter.
The acquisition expands Donaldson’s filtration capabilities and is expected to strengthen its position across several end markets, providing an additional source of growth as the company enters the final quarter of its fiscal year.
With record operating margins, stronger-than-expected results and contributions expected from the Facet acquisition, Donaldson enters the remainder of fiscal 2026 with solid momentum across much of its business portfolio.