Donaldson Co.’s profits slipped during its second quarter, missing Wall Street estimates due to weakness in its truck and heavy equipment markets.
The Bloomington-based maker of filtration systems for factories, airplanes and big trucks on Monday cut its profit forecast for the year, nipping its sales outlook, too.
Donaldson reported fiscal second-quarter earnings of $51 million or 34 cents per share, down 6 percent from $54 million or 35 cents a year ago. Wall Street analysts were looking for earnings per share of 38 cents on average.
The company’s sales of $596 million were 3 percent higher than a year ago, though analysts were expecting around $605 million.
Donaldson’s shares closed down $1.01, or 2.8 percent, at $35.44.
Donaldson’s gas turbine sales, part of its industrial products division, increased 79 percent. But that was offset by the performance of its engine products division, which had weaker sales in the North American truck market and in Asian and European equipment markets.
Plus, the company’s profit margin was crimped, partly due to a sales shift toward larger gas turbine projects and partly due to a lower ability to absorb fixed costs. “We continued to take actions to better align our manufacturing and operating expenses with our forecasted customer demand,” Bill Cook, Donaldson’s CEO, said in a statement.
Donaldson lowered its fiscal year earnings outlook to $1.61 to 1.81 per share from $1.68 to $1.88 per share. Also, the company said Monday that it expects sales to equal last year’s $2.5 billion, compared to a forecast three months ago of $2.5 billion to $2.6 billion.
“Based on input from key customers, we see current market conditions continuing in the near term due primarily to the ongoing high levels of global economic uncertainty,” Cook said. “Fortunately, we anticipate strength in our gas turbine business for the balance of our fiscal year, which will help offset some of the weakness in our other businesses.”