Loading...
•
Jul 31, 2020
Donaldson Q4 2020 Earnings Report
Donaldson's fourth quarter and full-year results saw increased gross margin amidst a volatile sales environment, with investments in long-term growth and returns to shareholders.
Key Takeaways
Donaldson Company reported fiscal year 2020 net earnings of $64.2 million for the fourth quarter, compared to $58.0 million in 2019. Fourth quarter sales declined by 15.1 percent to $617.4 million. The company is not issuing detailed guidance for full-year 2021 key performance metrics.
Fourth quarter sales declined 15.1 percent to $617.4 million.
Fourth quarter gross margin increased to 33.7 percent from 33.5 percent in the prior year.
Fourth quarter operating income as a rate of sales decreased to 13.4 percent from 14.4 percent in 2019.
The company invested $122 million for long-term growth and returned $201 million to shareholders.
Forward Guidance
Donaldson continues to experience volatility related to the COVID-19 pandemic, and the magnitude and duration of the impact from the pandemic remains uncertain. Consequently, the Company is not issuing detailed guidance for full-year 2021 key performance metrics at this time.
Positive Outlook
- Sales in August 2020, the first month of fiscal 2021, were down sequentially from July, which is typical seasonality, and about 10 percent from the prior year, reflecting an increase in APAC, driven by growth in China, and continued pressure in the Americas.
- Full-year sales trends are expected to vary widely by geography and market, and year-over-year performance of replacement parts and products related to new markets, like food and beverage, should continue to be better than the Company average.
- Sales in the first half of fiscal 2021 will likely experience year-over-year declines, due in large part to the timing of when the pandemic began.
- Optimization initiatives related to manufacturing, supply chain and procurement are expected to continue benefitting gross margin.
- Free cash flow conversion is expected above 100 percent.
Challenges Ahead
- Donaldson continues to experience volatility related to the COVID-19 pandemic, and the magnitude and duration of the impact from the pandemic remains uncertain.
Historical Earnings Impact
Analyze how earnings announcements historically affect stock price performance
Avg. Return Before/After Earnings
Loading earnings performance data...
Loading earnings reaction data...