Donaldson Company Inc. (
) announced after the close on Monday that its fiscal
fourth-quarter profit surged on higher worldwide sales and
DCI earnings rolled in at $51.2 million, or 65 cents per share,
up from $23.6 million, or 30 cents per share, a year earlier. Wall
Street expected 64 cents. Revenue jumped 22% to $515.2 million,
above the $470 million to $500 million projected by the company in
May. Gross margin widened to 36.3% from 32.8%.
"Our overall sales improvement was truly global as local
currency sales increased 28% in the Americas, 25% in Europe, 18% in
Asia and 8% in South Africa," said Chairman and Chief Executive
The company said its sales have benefited from the improving
economy, new products, and growth in emerging markets, while its
cost-cutting and restructuring measures have positioned it well for
the future. In fact, the firm has raised its quarterly dividend
twice this year.
For the new year, the company sees earnings of $2.28 to $2.48
per share on revenue of about $2 billion. Analysts expected $2.45
and $2.06 billion, respectively.
Heading into the earnings report, options players jumped on the
stock's calls. During the past 10 trading sessions, 6.8 calls have
been purchased to open on the International Securities Exchange
(ISE) for every one put purchased to open. This ratio of calls to
puts is higher than 98% of all those taken during the past year. In
other words, options players have rarely snatched up more calls
than puts during the past year.
Meanwhile, sentiment is far from an optimistic extreme. The
Schaeffer's put/call open interest ratio for DCI comes in at 0.99,
as put open interest nearly equals call open interest among options
slated to expire in less than three months. This ratio of puts to
calls is higher than 87% of all those taken during the past year,
indicating that traders have been more pessimistically aligned
toward the shares only 13% of the time during the past 12
Elsewhere, we find that Wall Street is still giving the security
a relatively cold shoulder. According to
, the equity has earned five "buy" ratings, seven "holds," and one
"sell" rating. While this leaves ample room for potential upgrades,
analysts might be hesitant to jump on the security considering that
its revenue outlook came in slightly below expectations.
Technically speaking, the stock is sitting on a gain of nearly
1% for the year. The equity has stair-stepped higher along the
support of its rising 10-month moving average since May 2009, but
has recently stalled along support in the 41-42 region.
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