Donaldson Earnings: Full-Year Revenue Guidance Lowered on End Market Headwinds

Narrow-moat-rated Donaldson reported disappointing fiscal second-quarter results as the company’s mobile solutions and industrial solutions segments both posted top-line decreases. Total sales were down 1% year over year, including a significant negative effect from currency translation. Adjusted EPS was $0.83 in the quarter, marking an improvement from the prior-year period but narrowly missing consensus estimates. Management opted to lower guidance for full-year revenue by 2 percentage points, while the outlook for operating margin improved slightly. We maintain our fair value estimate of $70 per share, as time value of money was offset by tempered near-term growth assumptions.