Donaldson Profit Falls 42 Percent As Sales Tumble

MINNEAPOLIS (AP) — Donaldson Co. Inc., which makes filtration systems, said Tuesday its fiscal third-quarter profit tumbled 42 percent on a steep drop in revenue that it blamed on recession-linked weakness in all markets for its products.

The company said it earned $26.6 million, or 34 cents per share, in the April quarter, compared with $46 million, or 57 cents per share, a year earlier. The results included restructuring costs of 6 cents per share.

Revenue dropped 30 percent to $413.4 million from $587.8 million a year ago.

Analysts, who usually exclude such costs from their calculations, expected profit of 30 cents per share on higher sales of $435 million, according to a survey by Thomson Reuters.

Chairman and Chief Executive Bill Cook said the company continued to see "very challenging and severe recessionary conditions in almost all of our end markets."

Cook said the company had reduced costs and improved gross margins enough to generate $100 million in cash and reduce debt by $39 million in the quarter, the third in Donaldson's fiscal year. But Cook added the company expects the global recession will continue at least through July, and said further cost-cutting would be considered.