Donaldson Co., the global manufacturer of filters for engines and factories, posted better-than-expected third-quarter earnings Friday and predicted that fiscal 2012 will be its second year in a row of record profits and revenues.

The Bloomington-based firm's shares rose 1.5 percent to $33.03 Friday, bucking the trend on another down day on Wall Street.

Donaldson earnings in the three-month period ended April 30 rose 18 percent to 46 cents per share, on a 9 percent sales gain to $647 million.

The average earnings estimate of 10 analysts who follow the company was 43 cents per share, according to Thomson Financial.

The company said it hit a record operating profit margin of 15.2 percent thanks to solid sales, efficient plants and effective execution aided by "continuous improvement initiatives across our company."

In a conference call with analysts, CEO Bill Cook said: "Bottom line, we continue to see many growth opportunities and expect that we will continue to grow faster than the end markets we serve through the introduction of new filtration technologies and products and also by increasing our sales coverage, especially in emerging geographies."

Earlier this week, Donaldson announced that it is expanding its plant capacity in China.

Cook said demand is "strong in the Americas, stable in Europe, and slowly improving in China."

The company also increased its full-year fiscal 2012 earnings guidance to $1.66 to $1.76 per share, an increase of 16 to 23 percent over fiscal 2011 earnings.

Full-year revenues are projected at $2.5 billion, up 9 percent from last year.

Cook cautioned that revenue may be restrained by negative currency translations resulting from European sales, but analysts were not too concerned.

"The big thing for us is that they've improved their competitive position in engines and are capturing more market share, air and liquid filtration, going forward," said Peter Johnson, an analyst at Mairs & Power investment management in St. Paul. "They have strong management and growth prospects ahead."

Donaldson's stock price has traded at all-time highs since late 2010. The company and its shareholders rebounded strongly from the 2008-09 recession as truck, diesel equipment and industrial companies ramped up production.

The stock peaked at nearly $39 per share in February and has backed off amid the economic-slowdown in Europe.

In an earlier interview, Cook said Donaldson took measures to avoid the ravages of 2008-09 by aggressively managing production, inventory and headcount, and was well-positioned to profitably grow when orders picked up in the second half of 2009.

Donaldson's productivity measures have paid off in a more profitable company. Operating expenses during the first three quarters of fiscal 2012 were 20.7 percent as a percent of sales, compared to 21.7 percent last year.

Neal St. Anthony • 612-673-7144