What's in the Offing for Donaldson (DCI) This Earnings Season?

Donaldson Company, Inc. DCI is scheduled to release third-quarter fiscal 2024 (ended Apr 30) results on Jun 6, before market open.

The company has an impressive earnings surprise history, with the average surprise being 4.5%. In the last reported quarter, its earnings of 81 cents per share surpassed the Zacks Consensus Estimate of 73 cents by 11%.

Let’s see how things have shaped up for Donaldson this earnings season.

Factors to Note

The Industrial Solutions segment’s results are likely to benefit from continued strength in dust collection and power generation verticals within the industrial filtration solutions business. The Zacks Consensus Estimate for the segment’s revenues is pegged at $273 million, indicating a 4.2% jump from the year-ago reported number.

The Life Sciences segment is expected to have benefited on the back of an increase in demand for disk drives. The consensus mark for the segment’s revenues is pegged at $76 million, which implies a 28.8% increase from the year-ago reported figure.

The acquisition of Univercells Technologies, which expanded Donaldson’s growing offering in the life sciences industry, is expected to support the company’s results.

The Zacks Consensus Estimate for the company’s fiscal third-quarter revenues is pegged at $920 million, which implies an increase of 5% from the year-ago quarter’s reported figure. The consensus estimate for adjusted earnings is pinned at 84 cents per share, indicating a 10.5% increase from the year-ago quarter’s reported number.

However, Donaldson is expected to put up a weak show in its upcoming results owing to softness in agriculture markets and weak end-market demand in China within the Off-Road and Off-Road businesses. Also, high input costs are expected to have pushed up the cost of sales, which is likely to have been reflected in the company’s margins.

Donaldson Company, Inc. Price and EPS Surprise Donaldson Company, Inc. Price and EPS Surprise

Donaldson Company, Inc. price-eps-surprise | Donaldson Company, Inc. Quote

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for DCI this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here, as elaborated below.

Earnings ESP: DCI has an Earnings ESP of 0.00% as both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at 84 cents. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

Zacks Rank: DCI presently carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Performance of Other Industrial Companies

IDEX Corporation’s IEX second-quarter adjusted earnings of $1.88 per share surpassed the Zacks Consensus Estimate of $1.75. On a year-over-year basis, the bottom line decreased approximately 10.1%.

IDEX’s net sales of $800.5 million underperformed the consensus estimate of $805 million.  The top line also decreased 5.3% year over year.

A. O. Smith Corporation’s AOS second-quarter 2024 adjusted earnings of $1.00 per share surpassed the Zacks Consensus Estimate of 99 cents. The bottom line increased 6% on a year-over-year basis.

Net sales of $978.8 million missed the consensus estimate of $995 million. However, the top line inched up 1% year over year, driven by strong demand for commercial water heaters in North America.

W.W. Grainger, Inc. GWW has reported earnings per share of $9.62 in the second quarter, which beat the Zacks Consensus Estimate of $9.58. The bottom line improved 0.1% year over year.

Grainger’s quarterly revenues rose 3.5% year over year to $4.24 billion. The top line missed the consensus estimate of $4.27 billion.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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