Donaldson Company, Inc. (NYSE:DCI) shares are trading lower after the company reported first-quarter FY25 results.

Sales increased 6.4% year over year to $900.1 million, beating the consensus of $888.9 million, led by higher volume growth across all segments.

By Segment, Mobile Solutions sales surged 6.0%, with Aftermarket sales climbing 10.7%, aided by market share gains and the impact of customer destocking in the prior-year period.

Industrial Solutions sales grew 4.6% in the quarter, driven by a 26.8% surge in Aerospace and Defense sales on strong end-market conditions.

Life Sciences segment sales increased 16.6%, led by market share gains, improved conditions in the Disk Drive market, and double-digit growth in Food & Beverage sales.

Gross margin contracted 10 basis points to 35.5% on higher costs. Adjusted EPS of 83 cents beat the consensus of 82 cents.

In the quarter, Donaldson paid $32.4 million in dividends and repurchased shares worth $74.9 million.

Last month, the Board of Directors declared a cash dividend per share of 27.0 cents, payable on December 23, to shareholders of record on December 9.

Tod Carpenter, chairman, president, and chief executive officer, said, “We gained share in several of our key businesses while continuing the footprint and cost optimization initiatives we began last quarter, strengthening our foundation for higher profitability.”

FY25 Outlook: Donaldson reiterated EPS forecast at $3.56 – $3.72 (vs. consensus of $3.62) and sales growth guidance at 2% – 6%, with a pricing benefit of around 1%. 

Donaldson projects mobile sales growth to be flat to up 4%, Industrial sales growth between 4% and 8% and Life Sciences sales to increase in low-double digits.

For the full year, Donaldson anticipates repurchasing approximately 2% to 3% of its shares outstanding. The company expects capital expenditures of $85 million and $105 million in FY25.

Investors can gain exposure to the stock via ALPS O’Shares U.S. Small-Cap Quality Dividend ETF (BATS:OUSM) and First Trust Horizon Managed Volatility Small/Mid ETF (NYSE:HSMV).

Price Action: DCI shares are down 4.56% at $74.51 at the last check Tuesday.

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