Donaldson Co. Inc. sustained a 15 percent drop in profits for its fiscal second quarter amid sagging demand for ag filtration equipment and beefed-up costs related to pension payments and the shutting of one of its Iowa plants, officials said Tuesday.
The Bloomington-based maker of filtration systems for trucks, backhoes, airplanes, factories and power plants was also plagued by negative currency exchange rates and lowered its forecast for full year 2015 for the second time in three months.
Donaldson's stock fell 67 cents Tuesday to close at $37.26.
The company saw quarterly sales rise 3 percent to $597 million, which is below the $605 million analysts generally expected.
Earnings fell to $50 million, or 35 cents a share. Excluding one-time costs for the Iowa plant closing and pension additions, earnings were 37 cents a share, in line with analysts' expectations.
In a statement, CEO Bill Cook noted that the company's gas turbine product sales doubled over last year and that its aerospace/defense and On-Road businesses grew 16 and 12 percent, respectively.
However, "these increases and a modest sales increase in our [truck] engine aftermarket business were partly offset by an 18 percent decline in off-road products, as a result of continued weak conditions in the global agriculture market and in the construction and mining markets in Asia-Pacific. Overall, the currency head winds were significant in the quarter and decreased our reported sales by $28 million compared to the prior year."
For full year 2015, Donaldson now expects sales will reach $2.4 billion to $2.5 billion. That's down from its November forecast of $2.5 billion to $2.6 billion.
It forecast 2015 adjusted earnings of $1.65 to $1.85 a share, excluding restructuring and pension lump sum settlement expenses. That's down from the prior forecast of $1.77 to $1.97 a share.