Bloomington-based filtration giant Donaldson Co. lowered its 2016 forecast after a drop in first-quarter sales and a $7.5 million restructuring charge prompted by slumping customer demand, unfavorable currency translations and costs associated with a revenue reporting problem in Europe.
Donaldson now expects earnings of $1.49 to $1.69 per share in fiscal year 2016, the company said on Wednesday. That’s down from the prior guidance of $1.57 to $1.77. Sales are expected to reach $2.2 billion to $2.3 billion.
Donaldson, which makes filtration systems for large trucks, factories, power plants and more, saw sales declines across all lines of business during the first quarter. The company is reeling from downturns in several industries, including the mining, agricultural equipment and oil and gas sectors.
President and CEO Tod Carpenter told analysts during a conference call Wednesday that “mining and agricultural end markets have remained particularly weak. And perspective from some of our largest original equipment manufacturing customers suggests that build rates are unlikely to rebound in the near term.”
There have been some layoffs as a result. Company spokesman Brad Pogalz said fewer than 1 percent of the company’s 12,500 workers were affected.
Some of the layoffs were at the Bloomington headquarters, Pogalz said, but declined to say how many there were.
Part of the company’s restructuring charge will go toward severance payouts. In addition, Donaldson ended some temporary contractor posts and closed select job openings, Pogalz said.
Revenue for the first fiscal quarter, ended Oct. 31, fell 9.8 percent to $538 million. Currency translations accounted for $3 million of the decrease, the company said on Wednesday.
Profits sunk 31 percent to $38.5 million, or 29 cents per share. Excluding the million restructuring charge and $2.1 million in costs related to the reporting gaffe in Europe, Donaldson’s adjusted net income was 34 cents per share, a penny better than analysts expected.
Sales, however, missed Wall Street’s forecast by $13.6 million.
Donaldson’s stock rose 76 cents per share a share to close at $31.28 Wednesday.