Donaldson Co. announced its financial results for its fiscal year 2014 first quarter, ended Oct. 31, 2013. Net sales totaled $599 million, a 2 percent increase from the same period in 2012. Operating income was $92 million, representing a 25 percent increase from the same period in 2012. Net earnings rose 14 percent from the first quarter of 2012, totaling $62 million.
"We had a good start to our new fiscal year as we delivered record operating results on a modest sales increase in our first quarter," said Bill Cook, Donaldson's CEO. "We believe that many of our first-fit equipment end markets have stabilized, while demand for our replacement filters continues to grow. Our Engine Products' sales increased 7 percent in local currency from last year, driven by our Engine Aftermarket and Aerospace and Defense businesses, which were up 9 and 20 percent, respectively. Our Industrial Products' sales decreased 4 percent in local currency. Consistent with our earlier guidance, Gas Turbine shipments decreased 27 percent but were partially offset by our Industrial Filtration Solutions and Special Applications businesses, which were up 2 and 5 percent, respectively. Geographically, excluding our Gas Turbine sales, our company's local currency sales growth was widespread across all of our major regions."
The company maintains its original outlook for FY 2014, expecting sales to be between $2.45 and $2.55 billion, or an increase of 1 to 5 percent. The full-year operating margin forecast is 14.2 to 15 percent, including approximately $30 million in operating expense increases for both incentive compensation and the company’s strategic business systems project. Cash generated by operating activities in FY 2014 is expected to be between $320 and $350 million.
Donaldson expects build rate of construction equipment to slowly improve in North America and Europe, but remain soft in Asia. Build rates of mining equipment are expected to remain at current low levels. As a result of anticipated improved utilization rates for off-road equipment and on-road heavy truck fleets in the field, the company's Engine Aftermarket buisiness is expected to grow.