Donaldson Company (NYSE:DCI) makes filtration systems for manufacturers ranging from farm equipment to construction, automotive and transportation fields. On Donaldson's Q1 FY 2008 earnings call, CEO William M. Cook offers a glimmer of hope for those who fear a major spillover effect from housing.
While international sales were helpful in offsetting the residential housing slump impact, other U.S. industries like farming and crops, aerospace and defense are contributing nicely as well.
William M. Cook - Chairman, President and Chief Executive Officer
...As expected our NAFTA engine businesses were mixture of different stories this quarter. In off-road, the small construction market and our sales to it remained weak due to the much publicized residential housing crisis. However, this was offset by the Ag equipment sector which was strong by... which was fueled by strong farm and crop conditions. Our aerospace and defense sales were up on strong military demand, particularly for filters for the new MRAP vehicles and replacement parts for existing military equipment that needs overhauling. In addition, our acquisition last year of AFS also added about $4.4 million to quarter one sales.
In our replacement parts, our aftermarket business truck ton miles in NAFTA moderated as the economy has slowed and general equipment utilization rates are mixed, better for large equipment in ag but slower or less for small construction equipment, resulting in a good quarter for aftermarket, which ended up 9%...
Both the construction and mining equipment sales continue to grow internationally.