Donaldson 2026 Q1 Earnings Beats Expectations, Net Income Rises 15.1%

Donaldson (DCI) delivered robust Q1 2026 results, surpassing revenue and EPS estimates while raising full-year guidance. The company reported $935.4 million in revenue, up 3.9% year-over-year, and EPS of $0.98, reflecting 18.1% growth. Management attributed the performance to strong market share gains, cost discipline, and demand across key segments.

Revenue

Donaldson’s Q1 revenue rose 3.9% to $935.4 million, driven by resilient demand across its diversified portfolio. The Mobile Solutions segment led with $598.3 million, bolstered by $480.3 million in Aftermarket sales. Industrial Solutions posted $257.8 million, with Industrial Filtration Solutions contributing $215.7 million. The Life Sciences segment grew 20%+ in Food & Beverage and Disk Drive, generating $79.3 million. Off-Road and On-Road sales totaled $94.6 million and $23.4 million, respectively, while Aerospace and Defense added $42.1 million.

Earnings/Net Income

Earnings per share surged 18.1% to $0.98, with net income rising 15.1% to $113.9 million. The company’s 15.5% operating margin marked a record, driven by pricing actions and operational efficiencies. The EPS increase reflects disciplined cost management and strong gross margin expansion, signaling healthy profitability.

Post-Earnings Price Action Review

The strategy of buying DCI when revenue misses and holding for 30 days yielded a 46.35% return, lagging the benchmark’s 85.89%. Despite a maximum drawdown of 0.00%, the approach’s Sharpe ratio of 0.35 and 22.50% volatility underscore its low-risk, low-reward profile. This underperformance highlights the stock’s sensitivity to earnings surprises and market sentiment.

CEO Commentary

CEO Tod Carpenter emphasized record sales of $935 million and a 15.5% operating margin, crediting the “razor-to-razorblades” model and technology leadership. Strategic priorities include R&D in HAMR disk drive tech, solvent recovery, and air filtration, alongside supply chain optimizations to mitigate $25 million in annual tariff impacts.

Guidance

Donaldson raised 2026 guidance to $3.8 billion in sales and $4.03 EPS (midpoint), with a 16.5% operating margin. Mobile Solutions growth is projected at 1–5%, while Industrial Filtration Solutions and Life Sciences are expected to outperform, driven by power generation and data center demand.

Additional News

Donaldson declared a $0.30 per-share dividend, reflecting confidence in sustained cash flow. The company also announced footprint optimization initiatives to offset global supply chain costs and announced expanded partnerships, including a strategic alliance with NAPA to strengthen its Aftermarket segment. These moves align with CEO Carpenter’s focus on operational agility and long-term stakeholder value.