Donaldson Co. reported an uptick in earnings Thursday that was partly bolstered by the company’s replacement parts business.
The Bloomington-based manufacturer of filters and other vehicle parts has been negatively affected by the global slowdown in the agriculture, mining and construction equipment markets.
But Donaldson’s fiscal third-quarter results topped Wall Street expectations. The company’s stock rose $2.43, or 7.3 percent, on Thursday, closing at $35.71.
“In aggregate, our business is showing more signs of stability than we have seen in well over a year,” said Chief Executive Tod Carpenter, during a conference call with analysts. “And while we are not ready to call bottom, given this protracted period of volatility, we were pleased with our overall performance in the quarter.”
In the quarter that ended April 30, more than 60 percent of Donaldson’s revenue came from replacement parts sales — which is more than average. The aftermarket business, which was the only part of the company’s engine products segment that didn’t see a sales drop, was a “bright spot” in the quarter, said Matt Arnold, an analyst for Edward Jones.
Arnold said another positive was the company’s margin performance. In the quarter, operating margin was 13.1 percent, compared with 11.7 percent last year.
“The long-term future for this company is quite good,” Arnold said. “It’s just a matter of them hitting their marks and navigating this period of challenges.”
During the quarter, Donaldson earned $54.8 million, or 41 cents per share. That beat analysts’ predictions of 39 cents per share and company earnings of $47.8 million from a year before.
Sales fell slightly to $571.3 million but still exceeded analysts’ forecasts of $550.8 million.
For the full-year 2016, Donaldson anticipates sales of about $2.2 billion, or about 6 percent below last year.