Writing about leading filtration company Donaldson
Before you ask me to show you what else I've got, consider how strong a performer this company is. Donaldson hasn't turned in a year with sub-20% returns on equity in more than a decade. Its competitors, Pall
The company's shares took a slight hit on Wednesday on softer margins in the fiscal third quarter. Sales and net income were up, as usual -- 12.6% and 8.4%, respectively. Those numbers, however, were boosted by foreign currency translation and tax benefits. Net income, in particular, would have shown a decline without the tax lay-up. That's pretty convenient timing, I have to say.
Some of the quarter's weakness stemmed from a softening in the transportation products business, where sales dropped 18.7%. The company foresaw this downturn as an inevitable result of the transport companies' rush to beat out the imposition of stricter diesel emissions standards in January.
The industrial products segment, on the other hand, was up 21%. Sales here were apparently more robust than anticipated, and the company struggled to expand to meet demand, which also crimped margins.
Donaldson didn't buy back any stock in the quarter, and I don't blame it. After a few more quarters like this, maybe Mr. Market will finally throw a real sale on the shares. Until then, value seekers won't be jumping up and down on their mattresses with glee.
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