Donaldson Raises Forecasts a Second Time

by: Eddy Elfenbein

Donaldson (NYSE:DCI) reported earnings Monday of 42 cents a share which was in line with forecasts. I was surprised to see the stock trading lower in the after-hours market Monday, but that seems to have had little effect on DCI’s open yesterday.

I thought it was a pretty good quarter. This was Donaldson’s second quarter of their fiscal year, so for the first six months, the company’s earnings-per-share is 17% higher than last year. Sales are up 14%. This is from the company’s press release:

(Bill Cook, Chairman, President and CEO stated:)

Our globally-diversified portfolio of filtration businesses provided the foundation to deliver another record quarter of sales and earnings... Strength in our Engine Products businesses internationally plus continued growth in our international Industrial Products businesses, including Industrial Filtration Solutions and Special Applications Products, helped offset some of our weaker NAFTA markets.

Overall, we are on track with our business plan for the balance of fiscal 2008. We see sufficient strength across our Engine Products and Industrial Products businesses to increase our sales forecast for both segments and anticipate achieving our first $2 billion revenue year. In addition, we remain confident that we will deliver our 19th consecutive year of record earnings.

The company also said that it expects 2008 EPS of $2 to $2.10 a share. That’s higher than what they first projected in November when they forecast $1.97 to $2.07. This is the second time Donaldson has increased its projection. In September, the company expected EPS of $1.92 to $2.01.

Here’s a look at the stock (black line, left scale) and EPS (gold line, right scale).

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