The end markets for Donaldson Co. Inc.'s industrial filters are generally improving, with the exception of gas turbine systems, which allowed the company to report an annual sales increase for the first time in two years.

Sales for the quarter increased 11.2 percent to $660.1 million and 6.8 percent to $2.4 billion for the year. The annual sales increase comes after declines in the previous two fiscal years.

"Sales remained strong through our fourth quarter, and benefits from our strategic initiatives combined with improving market conditions in our engine segment drove a meaningful increase in full-year sales and earnings," said Tod Carpenter, president and chief executive, in the Bloomington-based company's earnings release.

Donaldson earned $68.2 million, or 51 cents per share, compared with $59.5 million, or 44 cents per share, in the fourth quarter last year. That's a 15 percent increase.

Earnings per share were within the company's guidance for the quarter but less than what analysts expected. Analysts tracked by Zacks expected Donaldson to earn 53 cents in the quarter.

Adjusted earnings per share increased 10.9 percent for the quarter.

Excluding the impact of foreign currency translation, sales in the company's engine products segment rose 17.8 percent in the fourth quarter. Those sales gains were partly offset by a 15.4 percent decline in gas turbine systems within the company's industrial products segment. Overall sales in the industrial products segment were up 0.4 percent.

Looking ahead to fiscal 2018, the company expects full-year sales to increase between 4 to 8 percent and earnings in the range of $1.79 to $1.93 per share.

"Although the economic environment is still mixed, we plan to deliver strong earnings growth while also investing in technology development, capacity expansion and customer engagement," Carpenter said. "We are committed to building on the momentum from 2017, and I am confident that executing our fiscal 2018 priorities will create long-term value for our stakeholders."

Donaldson shares closed Thursday down nearly 7 percent at $43.40. Year to date, shares are up 3.1 percent.

"Donaldson is firmly positioned to resume a growth trajectory in sales and earnings following a challenging few years, while we are expecting continued gradual improvement in Donaldson's end-markets going forward," Edward Jones analyst Matt Arnold wrote in a research report Thursday.