Donaldson Company, Inc. (NYSE:DCI) announced today that it has updated its outlook for FY13.
FY13 Outlook
We are changing our sales and earnings outlook as conditions in many
of our end markets have recently weakened. Many of our Engine OEM and
Disk Drive Customers have lowered their production levels. In addition,
some large Gas Turbine project shipments have moved from our first
quarter into our second and third quarters. As a result, we now forecast
our first quarter FY13 sales to decline between 2 and 6 percent from
the prior year's first quarter and EPS to be between $0.30 and $0.36 per
share. We anticipate returning to growth beginning in our second
quarter as conditions are forecasted to begin slowly improving in many
end markets, and we anticipate a strong quarter for our Gas Turbine
project shipments.
- We now project our full year sales to be
between $2.52 and $2.62 billion, or up 1 to 5 percent over last year's
record. Our current forecast is based on the Euro at US$1.29 and 78 Yen
to the US$. We expect foreign currency translation to have a negative
impact on our sales for most of our fiscal year.
- Our
updated full year operating margin forecast is now 14.2 to 15.0
percent. We plan to maintain strong margin performance through cost
containment actions, which are currently being implemented.
- We now forecast our full year FY13 EPS to be between $1.68 and $1.88.
Engine Products: We now forecast FY13 sales to be equal to FY12, including the negative impact of foreign currency.
- Our on-road OEM Customers are now
planning to build fewer heavy- and medium-duty trucks in most regions.
Demand from our off-road OEM Customers is anticipated to be mixed: build
rates of new agriculture equipment is forecasted to remain good,
construction activity is slowly improving in North America but remains
weak in Europe and China, and mining activity is now slowing down
globally.
- We are anticipating lower
growth of our Aftermarket Products as current utilization rates for
off-road equipment and on-road heavy trucks have softened recently in
many regions. However, we should mitigate much of this through our
continued expansion into emerging economies, from the increasing number
of systems installed in the field with our proprietary filtration
systems, and from our increasing sales of liquid filtration products.
- We
forecast our Aerospace and Defense Products' sales to be equal to the
prior year as the continued slowdown in military spending is anticipated
to be offset by increased commercial aerospace sales.
Industrial Products: We forecast sales to increase 5 to 11 percent over FY12, including the negative impact of foreign currency.
- Our Industrial Filtration Solutions
Products' sales are projected to increase 0 to 6 percent. We assume
manufacturing activity will remain strong in the Americas, slowly
improve in Asia, and weaken in Europe.
- We
now anticipate our Gas Turbine Products' sales to be up 23 to 29
percent due to the continuing strength in the large turbine power
generation and in the oil and gas markets.
- Special
Applications Products' sales are forecast to increase 3 to 9 percent,
with lower growth expected from disk drive filtration and membranes
products.
The Company will conduct a call with analysts to discuss the revised outlook at 10:00 a.m. CT on Wednesday, October 24th. The Company plans to release its FY13 first quarter results pre-market on Wednesday, November 21st
and conduct its earnings call at 10:00 a.m. CT that morning. Dial-in
information will be emailed separately to institutional investors for
both calls. To listen to a webcast of either of these calls, please
visit the Investors page at www.donaldson.com.
About Donaldson Company, Inc.
Donaldson is a leading worldwide provider of filtration systems that
improve people's lives, enhance our Customers' equipment performance,
and protect our environment. We are a technology-driven Company
committed to satisfying our Customers' needs for filtration solutions
through innovative research and development, application expertise, and
global presence. Our approximately 13,200 employees contribute to the
Company's success by supporting our Customers at our more than 100
sales, manufacturing, and distribution locations around the world.
Donaldson is a member of the S&P MidCap 400 and Russell 1000
indices, and our shares trade on the NYSE under the symbol DCI.
Additional information is available at www.donaldson.com.
SAFE HARBOR STATEMENT UNDER THE SECURITIES REFORM ACT OF 1995
The Company desires to take advantage of the "safe harbor" provisions
of the Private Securities Litigation Reform Act of 1995 (the "Act") and
is making this cautionary statement in connection with such safe harbor
legislation. This announcement contains forward-looking statements,
including forecasts, plans, and projections relating to our business and
financial performance and global economic conditions, which involve
uncertainties that could materially impact results.
The Company wishes to caution investors that any forward-looking
statements are subject to uncertainties and other risk factors that
could cause actual results to differ materially from such statements,
including but not limited to risks associated with: world economic
factors and the ongoing economic uncertainty, reduced demand for hard
disk drive products with the increased use of flash memory, the
potential for some Customers to increase their reliance on their own
filtration capabilities, currency fluctuations, commodity prices,
political factors, the Company's international operations, highly
competitive markets, governmental laws and regulations, including the
impact of various economic stimulus and financial reform measures, the
implementation of our new information technology systems, potential
global events resulting in market instability including financial
bailouts and defaults of sovereign nations, military and terrorist
activities, health outbreaks, natural disasters, and other factors
included in our Annual and Quarterly Reports. We undertake no obligation
to publicly update or revise any forward-looking statements.
Donaldson Company, Inc.
Rich Sheffer, 952-887-3753
Oct 23, 2012