Donaldson Company Reports Decline in Q2 Net Sales and Earnings, Acquires Stake in Medica S.p.A.

Donaldson Company, Inc. reported its financial results for the second quarter of fiscal 2025, revealing a slight decline in net sales and net earnings compared to the same period last year. For the three months ended January 31, 2025, the company recorded net sales of $870.0 million, a decrease of 0.8% from $876.7 million in the prior year. Net earnings for the quarter were $95.9 million, down from $98.7 million, resulting in diluted earnings per share of $0.79, compared to $0.81 in the previous year. The decline in sales was attributed to unfavorable foreign currency impacts, which reduced net sales by approximately $14.7 million.

In the first half of fiscal 2025, Donaldson's net sales increased to $1.77 billion, up 2.7% from $1.72 billion in the same period last year. The growth was driven by a 2.7% increase in the Mobile Solutions segment and a 12.8% increase in the Life Sciences segment, which offset a slight increase in the Industrial Solutions segment. The company’s gross profit margin remained stable at 35.3% for the six months ended January 31, 2025, compared to 35.4% in the prior year.

Strategically, Donaldson made a significant investment in Medica S.p.A., acquiring a 49% stake for approximately $67.9 million. This acquisition is expected to enhance Donaldson's capabilities in filtration technology for medical applications and water purification. The company also continued its restructuring efforts, incurring $5.5 million in related expenses during the first half of the fiscal year, aimed at optimizing its global footprint and cost structure.

Operationally, Donaldson's total assets increased to $2.96 billion as of January 31, 2025, compared to $2.91 billion at the end of the previous fiscal year. The company reported a slight increase in inventory levels, which rose to $540.8 million, reflecting efforts to ensure timely deliveries. The company’s employee headcount remained stable, with approximately 150 locations worldwide, including 77 manufacturing and distribution centers.

Looking ahead, Donaldson anticipates continued challenges from foreign currency fluctuations and market conditions but remains optimistic about growth opportunities in its key segments. The company plans to leverage its recent acquisitions and ongoing restructuring initiatives to enhance operational efficiency and drive future profitability.