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Donaldson Q3 Earnings Hit by Currency, Restructuring Charges

Donaldson has reported third quarter 2015 net earnings of $46.4 million, or 33 cents per share, which includes restructuring charges of $5.2 million, or 3 cents per share. Foreign currency translation negatively impacted third quarter net earnings by $2.0 million, or 3.0 percent.

May 21, 2015

Donaldson has reported third quarter 2015 net earnings of $46.4 million, or 33 cents per share, which includes restructuring charges of $5.2 million, or 3 cents per share. Foreign currency translation negatively impacted third quarter net earnings by $2.0 million, or 3.0 percent. Adjusted earnings per share were 36 cents in third quarter, compared with 46 cents in the third quarter of 2014.

"Our third quarter results, and our full-year sales and earnings forecast, are in line with the guidance provided earlier this month, which reflects a slowdown of the Aftermarket business combined with continued pressure from off-road end markets and the strong U.S. dollar," said Tod Carpenter, Donaldson's CEO.

"Our Engine Aftermarket sales, in local currencies, increased 2 percent in third quarter, a modest pace compared with the 7 percent increase during the first half of fiscal 2015. Additionally, our first-fit Off-Road end markets remained challenged, with our local-currency sales declining at a pace consistent with year-to-date trends. In China, the pace of decline in our year-over-year sales accelerated in third quarter, with particular pressure on both Aftermarket and Off-Road Products."

"Although the end-market pressures we saw are reflective of our Customers' orders, we are taking further actions to improve our performance until business conditions rebound. Over the past several weeks, we identified additional restructuring initiatives that we expect will provide a similar level of annual savings as those we completed during our third quarter."

Third quarter 2015 net sales decreased 9.0 percent versus the prior year, reflecting sales declines in Engine Products and Industrial Products segments of 8.5 percent and 10.0 percent, respectively.

Excluding the impact of foreign currency translation, third quarter sales declined 1.9 percent compared with the prior year, reflecting local-currency sales declines of 1.3 percent in Engine Products and 2.9 percent in Industrial Products.

Compared with last year, the impact of foreign currency translation reduced third quarter sales by approximately $44.4 million, or 7.1 percent, and year-to-date sales by approximately $83.0 million, or 4.6 percent.

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