Compared to 2014, fourth quarter sales declined 8.8 percent and full-year sales declined 4.1 percent. Donaldson reported fourth quarter net earnings of $56.3 million, 41 cents per share, and full-year net earnings of $208.1 million, or $1.49 per share.
Foreign currency translation negatively impacted earnings by $5.4 million in fourth quarter and $14.3 million for the full year, or 7.5 percent and 5.5 percent, respectively.
Excluding the impact of currency translation, total sales decreased 1.1 percent in fourth quarter, reflecting a 5.7 percent decline in Engine Products, partially offset by an increase of 6.9 percent in Industrial Products.
Full-year 2015 sales in local currencies increased 1.3 percent, reflecting an increase in Industrial Products of 5.6 percent, partially offset by a decline of 1.1 percent in Engine Products.
Engine Products: Full-year 2016 Engine Product sales are expected to be in a range between a 2 percent decline and a 2 percent increase compared with 2015. In local currency, sales are expected to increase 2 percent to 6 percent, reflecting:
- Continued weakness in the global agriculture and mining equipment markets, partially offset by modest growth in on-road heavy truck and stable conditions in the construction equipment market;
- Growing utilization of on-road heavy-duty trucks and construction equipment in the field, while utilization of agriculture and mining equipment is expected to be down slightly. Donaldson expects growth in replacement filter sales resulting from the continued expansion of its proprietary first-fit platforms, combined with continued geographic and product portfolio expansion initiatives; and
- Growing sales of commercial aerospace products are expected to be partially offset by a continued slowdown in U.S. defense spending.
Industrial Products: Full-year 2016 Industrial Product sales are forecast to be in a range between a 3 percent decline and a 1 percent increase, compared to 2015. In local currency, sales are expected to increase 1 percent to 5 percent.
- Industrial Filtration Solutions' sales are expected to increase in the low-single-digit range;
- Gas Turbine sales are expected to decline between 9 percent and 13 percent, reflecting an expected market decline led by Europe and Asia Pacific, partially offset by continued aftermarket market share gains and leveraging the Northern Technical acquisition; and
- Special Applications' sales are expected to decline slightly due to the membrane and disk drive businesses, partially offset by growth in venting and semiconductor products.