Donaldson Company Inc (NYSE:DCI) stock rose 0.70% (As on June 4, 11:12:23 AM UTC-4, Source: Google Finance) after the company reported better-than-expected third quarter earnings and revenue, while raising its full-year profit guidance. Donaldson’s Mobile Solutions segment experienced a slight decline in sales by 0.4%, attributed to decreases in On-Road and Off-Road sales. However, Aftermarket sales showed a positive trend, increasing by 3.3%. The Industrial Solutions segment saw a 5.3% sales growth, driven by Aerospace and Defense, which surged by 27.1%. The Life Sciences segment also contributed to the overall growth, with a 0.7% increase in sales.

Meanwhile, Donaldson faced challenges with its gross margin, which decreased to 34.2% from 35.6% in 2024 due to higher manufacturing costs. The adjusted gross margin, excluding restructuring charges, was slightly better at 34.5%. Operating expenses also rose to 24.9% of sales, primarily due to impairment charges and restructuring costs. Nevertheless, the adjusted operating margin improved to 16.3%, reflecting effective expense management and operational efficiency.

DCI in the third quarter of FY25 has reported the adjusted earnings per share of 99 cents, beating the analysts’ estimates for the adjusted earnings per share of 95 cents. The company had reported the adjusted revenue growth of 1.3 percent to $940.1 million in the third quarter of FY25, beating the analysts’ estimates for revenue of $936.84 million.

Looking ahead, Donaldson raised its full-year adjusted EPS guidance to a range of $3.64 to $3.70, up from its prior outlook of $3.57 to $3.67. The new midpoint of $3.67 is above the consensus estimate of $3.60. The company maintained its forecast for full-year sales growth of 1% to 3%, with pricing expected to contribute a significant portion of this growth. The company remains optimistic about its future prospects, driven by disciplined execution and strategic investments across its segments.

For the Mobile Solutions segment, sales are expected to remain flat or grow by up to 2%, with Aftermarket sales showing low-single-digit growth. The Industrial Solutions segment is projected to increase sales by 2% to 4%, supported by strong demand in Aerospace and Defense. Life Sciences is expected to see high-single-digit growth, buoyed by healthy market demand. The company also forecasts capital expenditures to be between $75 million and $90 million, with adjusted free cash flow conversion expected to range from 80% to 90%.

Additionally, DCI has appointed Richard Lewis as its new Chief Operating Officer, effective 1 August 2025.