Donaldson 2026 Q1 Earnings Surpasses Expectations with 15.1% Net Income Growth

Donaldson (DCI) reported Q1 2026 earnings on Dec. 4, 2025, exceeding revenue and EPS estimates while raising full-year guidance. The company achieved a 3.9% revenue increase and an 18.1% EPS growth, with net income rising 15.1% year-over-year. Analysts highlighted the resilience of its filtration segments and updated fiscal 2026 EPS guidance to $4.03.

Revenue

Donaldson’s total revenue rose to $935.40 million in Q1 2026, up 3.9% from $900.10 million in Q1 2025. The Mobile Solutions segment led with $598.30 million, driven by robust performance in Aftermarket ($480.30 million) and Industrial Solutions ($257.80 million). Off-Road and On-Road segments reported $94.60 million and $23.40 million, respectively, while Aerospace and Defense contributed $42.10 million. The Life Sciences segment added $79.30 million, reflecting steady growth across diversified markets.

Earnings/Net Income

Earnings per share surged 18.1% to $0.98 in Q1 2026, compared to $0.83 in Q1 2025. Net income reached $113.90 million, a 15.1% increase from $99 million. The 18.1% EPS growth and 15.1% net income increase underscore strong operational performance.

Post-Earnings Price Action Review

The strategy of buying DCI when revenue misses and holding for 30 days resulted in a 46.35% return, significantly underperforming the benchmark return of 85.89%. The strategy had a maximum drawdown of 0.00%, a Sharpe ratio of 0.35, and a volatility of 22.50%, indicating a relatively low-risk but low-reward approach.

Donaldson’s stock price climbed 4.72% during the latest trading day, 4.39% for the week, and 11.46% month-to-date, reflecting investor optimism post-earnings.

CEO Commentary

CEO Tod Carpenter emphasized the company’s “strong performance with sales growth, operating margin expansion, and EPS increase,” attributing success to its filtration model, technology leadership, and strategic focus on Mobile Aftermarket and Power Generation. He highlighted R&D investments in HAMR and solvent recovery, expressing confidence in overcoming challenges like tariffs.

Guidance

Donaldson raised full-year 2026 guidance, projecting revenue of $3.8 billion and EPS of $4.03, with an operating margin of 16.5%. Strategic priorities include R&D, M&A, dividends, and share repurchases. The company expects CAPEX to align with prior expectations, with capital allocation focused on long-term growth.

Additional News

Donaldson announced a $0.30 dividend, reflecting its commitment to shareholder returns. The company also updated its full-year outlook, raising EPS guidance to $4.03 amid strong cash flow generation and operational leverage. Additionally, Donaldson’s stock reached a 52-week high of $93.85, driven by its 31.7% year-to-date return and positive market sentiment.