Donaldson Company Inc. (NYSE:DCI) reported third-quarter fiscal 2026 results on Tuesday that topped Wall Street expectations, driven by strength in its Mobile Solutions and Life Sciences businesses and supported by favorable currency impacts, pricing gains and higher volumes.

Revenue rose 5.8% year over year to $995.1 million, exceeding analysts’ estimates of $973.6 million. Adjusted earnings were $1.06 per share, slightly ahead of the consensus estimate of $1.05.

Adjusted gross margin was 34.4%, down 10 basis points from a year earlier as operational inefficiencies partially offset benefits from pricing, product mix improvements and volume leverage.

“Third quarter results marked a significant sequential step-up in performance, including all-time high sales, adjusted operating margin and adjusted earnings,” said Rich Lewis, president and chief executive officer.

“Strong performance in our Mobile and Life Sciences segments more than offset near-term operating headwinds in the Industrial segment, demonstrating the benefit of our diversified portfolio of businesses.

During the earnings call, the CEO said the company “successfully navigated macro uncertainty,” including uneven cyclical trends and the ongoing conflict in the Middle East.

During the quarter, Donaldson completed its acquisition of Facet Filtration, expanding its Industrial Solutions platform and increasing exposure to aerospace and power generation end markets.

Segment Performance

Mobile Solutions revenue increased 8.1% from a year ago, supported by higher volumes, pricing improvements and favorable foreign exchange rates. Off-Road sales rose 8.8% on stronger construction-related demand, while On-Road sales increased 5.2% due to higher truck production in Europe, the Middle East and Africa. Aftermarket revenue climbed 8.1%, reflecting broad-based growth across regions and channels.

Industrial Solutions revenue declined 0.6% as lower volumes offset pricing and foreign exchange benefits. Industrial Filtration Solutions sales increased 2.3%, supported by pricing actions and strength in power generation, partially offset by softer demand in industrial gases and dust collection. Aerospace and Defense sales fell 13.5% because of supply chain constraints and project timing.

Life Sciences revenue increased 12.7%, driven by strong demand in food and beverage applications and disk drive markets.

Outlook Raised

Donaldson raised its fiscal 2026 adjusted earnings outlook to a range of $3.94 to $4.01 per share from a prior range of $3.93 to $4.01. The updated guidance compares with analyst expectations of $3.98 per share.

The company also increased its fiscal 2026 sales forecast to between $3.801 billion and $3.875 billion, up from its previous outlook of $3.728 billion to $3.875 billion. Analysts were expecting revenue of $3.822 billion.

Donaldson now expects organic sales growth of 3% to 5%, compared with its previous forecast of 1% to 5%. The outlook includes $25 million to $30 million of revenue from the Facet acquisition and approximately $0.03 of earnings-per-share dilution.

Management said it remains focused on margin expansion and cost-efficiency initiatives, including footprint rationalization efforts expected to generate about $10 million in annualized savings by fiscal 2027.

DCI Price Action: Donaldson shares were up 2.32% at $83.60 at the time of publication on Tuesday, according to Benzinga Pro data.

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