Donaldson (NYSE:DCI) Posts Earnings Results, Misses Estimates By $0.07 EPS

27 Feb 2026, 00:58 by Sarita Garza · The Markets Daily

Donaldson (NYSE:DCI – Get Free Report) posted its quarterly earnings results on Thursday. The industrial products company reported $0.83 earnings per share (EPS) for the quarter, missing the consensus estimate of $0.90 by ($0.07), FiscalAI reports. Donaldson had a return on equity of 30.24% and a net margin of 10.25%.The company had revenue of $896.30 million during the quarter, compared to the consensus estimate of $898.64 million. During the same quarter in the prior year, the business earned $0.83 earnings per share. The firm’s revenue for the quarter was up 3.0% on a year-over-year basis. Donaldson updated its FY 2026 guidance to 3.930-4.010 EPS.

Here are the key takeaways from Donaldson’s conference call:

Donaldson reported record Q2 sales of $896 million (+3%) and reaffirmed a fiscal‑2026 outlook for ~$3.8 billion in sales with record operating margin and a midpoint EPS of $3.97, supported by ~90% free cash flow conversion.
The company announced its largest-ever acquisition, Facet (~$110M revenue, ~70% recurring replacement sales) which management says has higher margins, low capex, is expected to close in the next quarters and be earnings‑accretive within ~two years.
Q2 gross margin fell to 33.7% (-150 bps) and operating margin to 14% (from 15.2%) due to volume deleverage, a problematic ramp of large turbine production in Mexico (~40 bps headwind) and footprint optimization costs (~30 bps), prompting a ~30 bp reduction to midpoint operating margin guidance.
Segment strength is mixed but promising: Life Sciences grew 16% led by food & beverage and Disk Drive (HAMR/gas‑absorption filters), while Mobile Solutions saw robust independent aftermarket and China growth (+18%), offsetting weaker OE volumes.

Donaldson Stock Down 11.7%

NYSE DCI traded down $12.20 during trading on Thursday, hitting $92.22. The stock had a trading volume of 2,749,479 shares, compared to its average volume of 769,514. Donaldson has a 12 month low of $57.45 and a 12 month high of $112.84. The company has a debt-to-equity ratio of 0.44, a quick ratio of 1.39 and a current ratio of 2.15. The company’s 50-day moving average price is $99.99 and its two-hundred day moving average price is $89.08. The company has a market capitalization of $10.64 billion, a PE ratio of 28.73, a P/E/G ratio of 2.64 and a beta of 1.00.

Donaldson Announces Dividend

The company also recently announced a quarterly dividend, which will be paid on Friday, February 27th. Shareholders of record on Thursday, February 12th will be paid a $0.30 dividend. The ex-dividend date is Thursday, February 12th. This represents a $1.20 annualized dividend and a yield of 1.3%. Donaldson’s payout ratio is presently 37.38%.

Key Stories Impacting Donaldson

Here are the key news stories impacting Donaldson this week:

Positive Sentiment: Revenue and sales growth: Donaldson reported year-over-year sales growth (roughly +3%) and management described strong total sales for the quarter, showing demand resiliency in some end markets. Earnings Highlights
Neutral Sentiment: Company filings and call materials published: full press release, slide deck and call transcript are available for investors to review management commentary and segment detail. BusinessWire Release
Negative Sentiment: Earnings and revenue misses: GAAP EPS and adjusted EPS came in below consensus ($0.83 vs. ~$0.90) and revenue slightly missed estimates, which triggered the immediate sell-off. Zacks: Miss
Negative Sentiment: Lowered/trimmed FY26 guidance vs. consensus: management set FY26 EPS at $3.93–$4.01 (below street) and gave revenue guidance that sits below analysts’ expectations—investors interpreted this as weaker near-term profit visibility. Seeking Alpha: Lowered Outlook
Negative Sentiment: Margin pressure and segment weakness: management flagged ongoing margin compression—particularly in Industrial Solutions and aftermarket channels—which compressed EPS despite revenue growth. Seeking Alpha: Margin Pressure
Negative Sentiment: Acquisition and leverage concerns: the recent Facet Filtration acquisition (~$820M) raises net leverage to ~1.8–2.0x and is seen as priced at a premium; management expects accretion in FY2027 but the near-term debt and integration risk weighed on sentiment. Seeking Alpha: Acquisition/Leverage
Negative Sentiment: Rising short interest: short positions increased materially in February, signalling greater downside conviction and amplifying today’s selling pressure (higher volume on the decline).

Insider Buying and Selling

In related news, CFO Bradley J. Pogalz sold 566 shares of the firm’s stock in a transaction on Tuesday, December 9th. The shares were sold at an average price of $91.57, for a total value of $51,828.62. Following the completion of the transaction, the chief financial officer owned 434 shares of the company’s stock, valued at approximately $39,741.38. This trade represents a 56.60% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this hyperlink. Also, Director Ajita G. Rajendra sold 19,800 shares of Donaldson stock in a transaction on Friday, December 5th. The shares were sold at an average price of $92.04, for a total transaction of $1,822,392.00. Following the completion of the sale, the director owned 43,993 shares in the company, valued at $4,049,115.72. The trade was a 31.04% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. 2.20% of the stock is owned by company insiders.

Hedge Funds Weigh In On Donaldson

Hedge funds have recently modified their holdings of the stock. Moneta Group Investment Advisors LLC bought a new position in Donaldson in the 3rd quarter valued at about $227,000. Vise Technologies Inc. purchased a new position in Donaldson in the third quarter worth $226,000. Great Lakes Advisors LLC bought a new position in shares of Donaldson during the 4th quarter valued at approximately $220,000. Ausdal Financial Partners Inc. purchased a new position in shares of Donaldson during the 2nd quarter valued at $214,000. Finally, Wealthspire Retirement LLC bought a new position in Donaldson during the fourth quarter worth about $209,000. Institutional investors own 82.81% of the company’s stock.

Wall Street Analyst Weigh In

DCI has been the topic of a number of recent analyst reports. Morgan Stanley upgraded Donaldson from an “underweight” rating to an “equal weight” rating and raised their target price for the stock from $72.00 to $84.00 in a report on Monday, November 24th. Robert W. Baird set a $110.00 price target on shares of Donaldson in a research report on Monday, February 2nd. Weiss Ratings reissued a “buy (b)” rating on shares of Donaldson in a research note on Friday, January 9th. Stifel Nicolaus boosted their price objective on shares of Donaldson from $90.00 to $96.00 and gave the company a “hold” rating in a report on Friday, December 5th. Finally, Jefferies Financial Group increased their target price on shares of Donaldson to $123.00 and gave the stock a “buy” rating in a report on Monday, February 2nd. Three equities research analysts have rated the stock with a Buy rating and two have issued a Hold rating to the company’s stock. Based on data from MarketBeat.com, the stock currently has a consensus rating of “Moderate Buy” and an average price target of $101.80.

Get Our Latest Report on DCI

About Donaldson

(Get Free Report)

Donaldson Company, Inc (NYSE: DCI) is a global provider of filtration systems and replacement parts for a wide range of industries. The company develops and manufactures air, liquid and gas filtration solutions for engine and industrial applications, helping customers improve performance, lower emissions and extend equipment life. Donaldson’s product portfolio includes engine air intake filters, fuel filters, hydraulic filters, compressor filters, dust collection systems and gas turbine air intake systems.

Serving markets such as agriculture, construction, mining, power generation, aerospace and original equipment manufacturing, Donaldson operates through two primary business segments: Engine Products and Industrial Products.