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Last Update: 25-Feb-13 07:51 ET
Donaldson shares little changed following miss on earnings
Donaldson (DCI $36.45 +0.00) reported second quarter earnings of $0.34 per share, $0.04 worse than the Capital IQ consensus of $0.38, while revenues rose 2.6% year/year to $596 million versus the $605.26 million consensus. The company issued mixed guidance for fiscal year 2013 with EPS of $1.61-1.81 versus the $1.76 consensus and revenues of ~equal to last year's $2.5 billion versus the $2.55 billion consensus. Guidance assumptions: Revenue forecast is based on the Euro at $1.34 and 94 Yen to the USD. full-year operating margin forecast is 13.9-14.7%. Cash generated by operating activities is projected to be between $240-270 mln. capital spending is estimated to be between $90-100 mln. Outlook by segment: Engine Products: forecast FY13 sales to decrease slightly compared to FY12, including the impact of foreign currency. On-Road OEM Customers are planning to build fewer heavy- and medium-duty trucks. Demand from Off-Road OEM Customers is anticipated to be mixed: build rates of agriculture equipment are forecasted to remain good, build rates of construction equipment are expected to slowly improve in North America but remain weak in Europe and China, and build rates of mining equipment are expected to decrease globally. anticipating slowly improving growth for Aftermarket Products. Current utilization rates for off-road equipment and on-road heavy trucks began stabilizing late in the second quarter and inventory levels at dealers and distributors are consistent with current utilization. Co should benefit from continued expansion into emerging economies, from the increasing number of systems installed in the field with proprietary filters, and from increasing sales of liquid filtration products. Aerospace and Defense Products' sales to be slightly lower than last year as the continued slowdown in military activity is expected to be partially offset by growth from commercial aerospace sales. Industrial Products: forecast sales to increase 1 to 6% over FY12, including the impact of foreign currency. Industrial Filtration Solutions Products' sales are projected to decrease slightly compared to last year. Co assumes manufacturing activity will increase moderately in the Americas, slowly improve in Asia, and continue to be weak in Europe. anticipate Gas Turbine Products' sales to be up 27-32% due to continued strength in both the large turbine power generation and the oil and gas markets. Special Applications Products' sales are now forecast to be down 1 to 6% with expected weaker end market demand for disk drive filters partially offset by growth from membranes products and integrated venting products.
