Donaldson (DCI) Q2 Earnings Report Preview: What To Look For

Filtration equipment manufacturer Donaldson (NYSE:DCI) will be announcing earnings results tomorrow before the bell. Here’s what to look for.

Donaldson beat analysts’ revenue expectations by 1.1% last quarter, reporting revenues of $927.9 million, up 6% year on year. It was a very strong quarter for the company, with an impressive beat of analysts’ constant currency revenue estimates and a decent beat of analysts’ earnings estimates.

Is Donaldson a buy or sell going into earnings? Read our full analysis here, it’s free.

This quarter, analysts are expecting Donaldson’s revenue to grow 7.2% year on year to $942.8 million, a reversal from the 1.2% decrease it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.89 per share.

The majority of analysts covering the company have reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Donaldson has missed Wall Street’s revenue estimates three times over the last two years.

Looking at Donaldson’s peers in the gas and liquid handling segment, some have already reported their Q2 results, giving us a hint as to what we can expect. Flowserve delivered year-on-year revenue growth of 7.1%, beating analysts’ expectations by 2.4%, and SPX Technologies reported revenues up 18.4%, topping estimates by 2.2%. Flowserve traded down 3.2% following the results while SPX Technologies was up 1%.

Read our full analysis of Flowserve’s results here and SPX Technologies’s results here.

Valuation multiples for many growth stocks have not yet reverted to their early 2021 highs, but the market was optimistic at the end of 2023 thanks to cooling inflation. 2024 has been a different story as mixed signals have led to market volatility, and while some of the gas and liquid handling stocks have fared somewhat better, they have not been spared, with share prices down 2.2% on average over the last month. Donaldson’s stock price was unchanged during the same time and is heading into earnings with an average analyst price target of $75 (compared to the current share price of $74.85).

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