Donaldson Company (DCI) DCI Q4 Financial Results Summary
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Donaldson Company (DCI) Q4 2026: Record Sales and Earnings Growth — Positive Outlook Ahead
Donaldson Company, Inc. (NYSE: DCI) reported a strong fourth quarter for fiscal 2026, achieving record sales and earnings. The company’s sales reached $1.1 billion, an increase of $80.1 million or 8.0% compared to the same quarter last year. This growth was driven by higher volumes and contributions from the recent acquisition of Facet Filtration.
Key Financial Metrics
- Sales: $1.1 billion, up $80.1 million or +8.0% YoY
- GAAP EPS: $1.10, up $0.13 or +13.4% YoY
- Adjusted EPS: $1.15, up $0.12 or +11.7% YoY
- Gross Margin: 36.3%, up 180 basis points from 34.5% in Q4 2025
- Operating Margin: 16.7%, up 120 basis points from 15.5% in Q4 2025
The quarter's performance is a positive signal for shareholders, reflecting robust operational execution and strategic growth initiatives. The increase in both GAAP and adjusted EPS indicates that the company is effectively managing costs while expanding its revenue base.
Shareholder Returns and Debt Management
Donaldson returned approximately $37 million to shareholders through dividends and reduced $102 million of debt related to the Facet acquisition. For the full year, the company returned about $250 million to shareholders, including dividends and share repurchases, which demonstrates a commitment to returning value to investors.
Fiscal 2027 Guidance
Looking ahead, Donaldson has provided optimistic guidance for fiscal 2027, projecting sales growth between 5.5% and 9.5% and EPS in the range of $4.22 to $4.38, which includes an estimated $0.12 dilution from the Facet acquisition. This guidance suggests that the company expects to continue its growth trajectory, supported by strong demand in key markets.
Segment Performance
- Mobile Solutions: Sales increased 7.9%, driven by growth in Aftermarket and On-Road segments.
- Industrial Solutions: Sales rose 7.7%, with the Facet acquisition contributing significantly to growth.
- Life Sciences: Sales grew 9.7%, benefiting from strong demand in Disk Drive and Food & Beverage sectors.
The performance across these segments highlights Donaldson's diversified portfolio and its ability to capitalize on growth opportunities in various markets.
Forward Catalysts
Investors should watch for the following catalysts in the upcoming quarter:
- Continued integration and performance improvements from the Facet acquisition.
- Progress in operational efficiencies and margin expansion.
- Updates on sales growth in key segments, particularly Aerospace and Defense, which is projected to see over 50% growth due to Facet's contributions.
In conclusion, Donaldson's fourth quarter results reflect a strong operational performance and a positive outlook for fiscal 2027. The company's strategic initiatives and commitment to shareholder returns position it well for continued growth, making it an attractive prospect for investors.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In millions)
(Unaudited)
| Three Months Ended July 31, 2026 | Three Months Ended July 31, 2025 |
|---|---|
| Net sales $1,058.8 | $980.7 |
| Cost of sales (675.5) | (641.9) |
| Gross margin 383.3 | 338.8 |
| Operating expenses (207.6) | (187.3) |
| Operating income 175.7 | 151.5 |
| Other income (expense) (14.7) | (7.1) |
| Earnings before income taxes 161.0 | 144.4 |
| Income tax expense (36.8) | (30.3) |
| Net earnings $124.2 | $114.1 |
| Earnings per share: Basic $1.10 | $0.97 |
| Earnings per share: Diluted $1.10 | $0.97 |
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)
(Unaudited)
| Assets July 31, 2026 | July 31, 2025 |
|---|---|
| Current assets: Cash and cash equivalents $250.4 | $180.4 |
| Accounts receivable, net 758.1 | 662.2 |
| Inventories, net 538.7 | 513.6 |
| Prepaid expenses and other current assets 122.5 | 105.5 |
| Total current assets 1,669.7 | 1,461.7 |
| Property, plant and equipment, net 633.3 | 644.5 |
| Goodwill 1,086.8 | 493.6 |
| Intangible assets, net 304.6 | 97.4 |
| Other long-term assets 292.4 | 280.0 |
| Total assets $3,986.8 | $2,977.2 |
| Liabilities and Stockholders’ Equity Current liabilities: Short-term borrowings $44.8 | $31.2 |
| Current maturities of long-term debt — | 6.7 |
| Accounts payable 378.6 | 368.6 |
| Accrued employee compensation and related taxes 152.5 | 144.3 |
| Income taxes payable 20.5 | 43.9 |
| Other current liabilities 207.7 | 162.5 |
| Total current liabilities 804.1 | 757.2 |
| Long-term debt 1,280.0 | 630.4 |
| Non-current income taxes payable 19.0 | 19.0 |
| Deferred income taxes 28.3 | 10.5 |
| Other long-term liabilities 91.0 | 106.6 |
| Total liabilities 2,222.4 | 1,523.7 |
| Total stockholders’ equity 1,764.4 | 1,453.5 |
| Total liabilities and stockholders’ equity $3,986.8 | $2,977.2 |
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