10-Q · June 2, 2026
Donaldson Company reported record third quarter sales of $995.1 million, up 5.8% from $940.1 million in the prior year, with diluted EPS rising to $1.00 from $0.48. The Mobile Solutions and Life Sciences segments drove…
Earnings analysis · 10-K
DCI earnings analysis
Filed September 25, 2026 · Our reading of the company's report
The latest report
Donaldson delivered a strong fiscal 2026 recovery, with revenue up 5.3% to $3,885.6 million, operating margin expanding to 15.4% and diluted EPS rising to $3.85. Mobile Solutions and Life Sciences drove growth, while…
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Donaldson delivered a strong fiscal 2026 recovery, with revenue up 5.3% to $3,885.6 million, operating margin expanding to 15.4% and diluted EPS rising to $3.85. Mobile Solutions and Life Sciences drove growth, while Industrial Solutions suffered a significant profitability decline from manufacturing-transition and footprint-optimization issues. The Facet acquisition expands exposure to durable aerospace, defense and power-generation markets but materially increased leverage, goodwill and integration risk; the absence of numeric revenue or EPS guidance supports a neutral rather than bullish stance.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $3.85
What stood out
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Global filtration platform and technical moat
Donaldson describes itself as a technology-led filtration leader with more than 150 locations across six continents, including 79 manufacturing and/or distribution centers. It emphasizes stringent technical and performance requirements, reliability and value as reasons customers select its solutions.
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Strong earnings and margin recovery
Fiscal 2026 revenue rose 5.3% to $3,885.6 million, while operating income increased 21.1% to $599.9 million and diluted EPS rose to $3.85 from $3.05. Operating margin improved to 15.4% from 13.4%, despite a modest gross-margin decline to 34.6% from 34.8%.
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Three-year recovery after 2025 impairment
The three-year trend shows revenue increasing from $3,586.3 million in fiscal 2024 to $3,690.9 million in 2025 and $3,885.6 million in 2026; diluted EPS moved from $3.38 to $3.05 to $3.85. Fiscal 2025 included a $62.0 million intangible impairment, which did not recur in 2026.
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Mobile Solutions drives profitable growth
Mobile Solutions remained the core growth and profit engine: revenue increased 5.6% to $2,419.7 million and segment pretax margin expanded to 19.3% from 18.2%. Aftermarket revenue increased $115.7 million, attributed to market share gains and higher vehicle utilization in all regions.
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Life Sciences profitability inflects higher
Life Sciences revenue grew 12.8% to $333.2 million and segment pretax margin improved to 9.7% from 1.5%, driven by higher volume and favorable mix. Growth was led by strong global sales in Food and Beverage and Disk Drive markets.
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Strategic acquisition alongside shareholder returns
Capital deployment supported both strategic expansion and shareholders: Donaldson paid $141.2 million of dividends, repurchased $111.2 million of stock and spent $67.4 million on capital expenditures. It acquired Facet for $830.2 million of cash consideration to strengthen aerospace, defense and power-generation filtration.
What to watch
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Facet integration and leverage
The Facet acquisition added $587.4 million of goodwill and $225.6 million of intangible assets, while Facet contributed only $30.3 million of revenue and $0.1 million of pretax earnings from May 4 through July 31, 2026. The company also increased long-term debt to $1,280.0 million and total debt to 42.9% of capitalization from 31.5%, creating integration, impairment and leverage risk.
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Industrial execution pressures margins
Industrial Solutions revenue increased only 2.6% to $1,132.7 million, but segment pretax earnings declined 21.3% to $155.6 million and margin fell to 13.7% from 17.9%. Management attributed the deterioration primarily to inefficiencies from moving Power Generation equipment production and footprint-optimization costs, indicating execution risk in the operating model.
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Tariff and geopolitical exposure
The filing identifies potential new or incremental tariffs as a material risk, particularly sustained tariff increases on imports to the United States from Mexico, China and the European Union. Management states that such actions could disrupt supply chains, increase costs and have a significant adverse effect; the company also disclosed that the Iran conflict and Strait of Hormuz blockade caused significant commodity-price volatility.
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AI and cybersecurity execution risk
The company is expanding its use of AI across technology development and business operations, but says deficiencies in algorithms, datasets or implementation could cause inaccurate outputs, operational disruptions or data loss. It also identifies evolving regulation, cybersecurity threats and uncertain returns on AI investment as risks; no material cybersecurity incident had been identified as of the filing date.
Management's outlook
The 10-K does not provide annual revenue or EPS guidance. It expects fiscal 2027 capital expenditures of $70 million to $90 million and states that liquidity should be sufficient for the next 12 months and beyond.
Earlier filings 4
10-K · September 26, 2025
Donaldson positions itself as a technology-led filtration leader with three strategic priorities: extend market access (notably bioprocessing), expand technologies & connected solutions, and pursue strategic…
10-Q · June 3, 2025
Donaldson reported quarterly net sales of $940.1 million, up $12.2 million (1.3%) versus the prior-year quarter, but earnings deteriorated as a $62.0 million impairment and higher manufacturing costs drove operating…
10-Q · June 4, 2024
Donaldson reported net sales of $927.9 million for the three months ended April 30, 2024, up $52.2 million or 6.0% year-over-year, with gross margin expanding to 35.6% (from 33.0%) and diluted EPS rising to $0.92 (from…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.