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Jan 31, 2022
Donaldson Q2 2022 Earnings Report
Reported record second quarter earnings driven by strong sales growth and effective expense management.
Key Takeaways
Donaldson Company reported a strong second quarter with record sales of $802.5 million, an 18.2% increase from the previous year. GAAP EPS increased by 30.4% to $0.57, and adjusted EPS increased by 9.8% to $0.52. The company is increasing its fiscal year 2022 sales and EPS guidance.
Second quarter sales increased by 18.2% year-over-year, reaching a record $802.5 million.
GAAP EPS increased by 30.4% to $0.57, while adjusted EPS increased by 9.8% to $0.52.
The Engine Products segment sales increased by 19.8%, driven by growth in Aerospace and Defense, Off-Road, and Aftermarket.
The Industrial Products segment sales rose by 14.6%, with strong growth in Gas Turbine Systems and Industrial Filtration Solutions.
Donaldson
Donaldson
Forward Guidance
Donaldson is increasing its fiscal 2022 sales and EPS guidance to reflect a better-than-expected sales outlook given first half performance combined with additional pricing realization planned in the second half of the year.
Positive Outlook
- Net sales are projected to increase between 11% and 15% year-over-year.
- Fiscal 2022 GAAP EPS is now expected to be between $2.66 and $2.76.
- Engine sales are projected to increase between 12% to 16% compared with 2021.
- Aerospace and Defense sales are also projected to increase versus previous expectations due to improved commercial aerospace market conditions and market share gains.
- Industrial sales are expected to increase between 9% and 13% compared with 2021.
Challenges Ahead
- Currency translation is forecast to negatively impact sales by approximately 2%.
- Fiscal 2022 gross margin is expected to be down between 1 to 1.5 percentage points compared with 2021.
- Inflationary pressures were greater than expected in the first half and are anticipated to continue through the balance of the year.
- Fiscal 2022 operating margin is forecast to be between 14.0% and 14.4%.
- The Company anticipates fiscal 2022 interest expense of approximately $14.0 million.