Donaldson shares slide after earnings miss and weaker profit outlook
February 26, 2026 8:25 AM
IH Market News
Donaldson Company (NYSE:DCI) shares fell more than 4% in premarket trading Thursday after the filtration products manufacturer reported quarterly results that missed analyst expectations and lowered parts of its fiscal 2026 outlook.
The stock declined 4.39% ahead of the U.S. market open following the earnings release.
The company posted adjusted earnings per share of $0.83 for its second quarter, falling short of the consensus estimate of $0.89. Revenue rose 3.0% year over year to a record $896.3 million, compared with $870.0 million in the prior-year period, but narrowly missed analyst forecasts of $898.59 million.
Sales growth was supported by favorable foreign exchange movements and pricing improvements, although weaker volumes partially offset those gains.
Guidance disappoints investors
Donaldson forecast full-year fiscal 2026 adjusted earnings per share between $3.93 and $4.01. The midpoint of $3.97 came in below analyst expectations of $4.05, contributing to the negative market reaction.
“This quarter, the Donaldson team delivered record sales, strengthened the foundation to meet strong customer demand in key, high-margin businesses and made further progress on our footprint optimization initiatives, despite near-term challenges,” said Tod Carpenter, chairman, president and chief executive officer.
The company also revised its adjusted operating margin outlook downward to a range of 16.0% to 16.4%, compared with its previous forecast of 16.2% to 16.8%, while maintaining its expectation for fiscal 2026 sales growth of 1% to 5%.
Margins pressured by operational shifts
Gross margin declined to 33.5% from 35.2% a year earlier, reflecting production inefficiencies tied to manufacturing adjustments supporting stronger Power Generation demand as well as costs linked to facility optimization initiatives. Adjusted operating margin fell to 14.0%, compared with 15.2% in the prior-year quarter.
Performance across segments was mixed. Mobile Solutions sales increased 1.6%, with Off-Road revenue rising 7.8% amid improving market conditions, while On-Road sales dropped 9.2% due to weaker global truck production.
Industrial Solutions revenue grew 2.4%, though Aerospace and Defense sales declined 19.4% because of project timing effects. The Life Sciences segment delivered the strongest growth, with sales rising 16.2% driven by demand in Food and Beverage and Disk Drive equipment markets.
Acquisition expands filtration portfolio
During the quarter, Donaldson also announced an agreement to acquire fuel and fluid filtration specialist Facet for approximately $820 million, a move aimed at expanding its product portfolio and strengthening long-term growth opportunities.
Donaldson Company stock price
Original: Donaldson shares slide after earnings miss and weaker profit outlook
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