Donaldson Company, Inc. DCI is scheduled to release third-quarter fiscal 2025 (ended April 30) results on June 3, before market open.

The company’s earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters, while missing the mark in one. The average surprise was 3.8%. In the last reported quarter, its earnings of 83 cents per share missed the Zacks Consensus Estimate of 85 cents by 2.4%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Let’s see how things have shaped up for Donaldson this earnings season.

Factors to Note

In the third quarter of fiscal 2025, the Industrial Solutions segment’s results are expected to benefit from strong momentum in the commercial aerospace market. This growth was driven by increased demand for new equipment and solid demand in defense markets, arising from higher orders and porting activity. Persistent strength in the aerospace and defense business is likely to have aided the company’s performance as well. The Zacks Consensus Estimate for the segment’s revenues is pegged at $284 million, indicating a 5.6% jump from the year-ago reported number.

The Life Sciences segment has been reaping the benefits from an increase in demand for disk drives, and food & beverage products in Europe, the Middle East and Africa, and the Asia Pacific region. The consensus mark for the segment’s revenues is pegged at $75 million, which implies a 1.4% increase from the year-ago reported figure.

Higher volume in the aftermarket business, driven by positive market trends and the impact of expanded market share, is expected to have driven the performance of the Mobile Solutions segment. However, softness in agriculture markets within the Off-Road business and decrease in global truck production within the On-Road business are expected to have partially dented the segment’s performance. The consensus estimate for the segment’s revenues stands at $578 million. While this represents a 1.2% decline from the same quarter last year, it marks a 5.5% improvement over the previous quarter.

In August 2024, Donaldson acquired a 49% minority stake in Medica S.p.A. which enabled it to penetrate new markets and diversify its offerings in the medical device and water purification sectors. This is expected to support its fiscal third-quarter results.

The Zacks Consensus Estimate for the company’s revenues is pegged at $940.5 million, which implies an increase of 1.4% from the year-ago quarter’s reported figure. The consensus estimate for adjusted earnings is pinned at 95 cents per share, indicating a 3.3% increase from the year-ago quarter’s reported number.

However, the escalating selling, general and administrative (SG&A) expenses pose a threat to DCI’s bottom line. Increasing headcount and incremental expenses associated with investments in acquired businesses are expected to have pushed up the SG&A expenses, which are likely to have impacted Donaldson’s margins in the fiscal third quarter.