Donaldson Q1 2022 Earnings Report
Key Takeaways
Donaldson Company reported a strong first quarter for fiscal year 2022, achieving record sales of $760.9 million and net earnings of $77.1 million. The company's EPS increased to $0.61. Strong demand and expense leverage helped offset gross margin pressure from rising costs.
First quarter sales increased 19.5% year-over-year to a record $760.9 million.
Operating margin increased to 14.1% from 13.7% in the prior year.
Earnings per share increased 26.1% to $0.61, compared to $0.48 in 2021.
The company raised its fiscal year 2022 sales and EPS guidance, reflecting strong first quarter results and anticipated price increases.
Donaldson
Donaldson
Donaldson Revenue by Geographic Location
Forward Guidance
Donaldson increased its fiscal 2022 sales and EPS guidance to reflect better than expected sales in the first quarter, combined with the anticipated incremental impact of additional price increases planned for the remainder of the year.
Positive Outlook
- Net sales are projected to increase between 8% and 12% year-over-year.
- Fiscal 2022 GAAP EPS is now expected to be between $2.57 and $2.73.
- Engine sales are projected to increase between 8% and 12%.
- Industrial sales are projected to increase between 7% and 11%.
- Donaldson is expecting to repurchase approximately 2% of its outstanding shares during fiscal 2022.
Challenges Ahead
- Currency translation is expected to be a nominal headwind.
- Sales growth during the first half of the year is expected to outpace the second half of the year.
- Fiscal 2022 gross margin is expected to be down between 0.5 and 1.0 percentage point compared with 2021.
- On-Road sales are forecasted to be below previous guidance driven by weaker demand related to customer supply chain issues.
- Free cash flow conversion is expected to be between 70% and 80%, down from between 80% and 90% previously.
Revenue & Expenses
Visualization of income flow from segment revenue to net income