What Happened?

Shares of filtration equipment manufacturer Donaldson (NYSE: DCI) fell 11.6% in the afternoon session after the company reported fourth-quarter 2025 results where earnings per share (EPS) missed estimates and it lowered its full-year profit forecast. 

Donaldson posted adjusted earnings of $0.83 per share, which missed Wall Street's expectations of $0.89. Revenue of $896.3 million was roughly in line with estimates. While total sales grew 3% year-on-year, the company's profitability weakened, driven by pressure on profit margins from operational inefficiencies. Specifically, its gross margin fell to 33.4% from 35.2% in the prior year's quarter. Compounding the issue, Donaldson revised its outlook for the full year, lowering its guidance for adjusted earnings per share. The combination of the earnings miss and the reduced forecast led to the negative investor reaction.

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What Is The Market Telling Us

Donaldson’s shares are not very volatile and have only had 4 moves greater than 5% over the last year. Moves this big are rare for Donaldson and indicate this news significantly impacted the market’s perception of the business.

The biggest move we wrote about over the last year was 3 months ago when the stock gained 7.6% on the news that the company reported third-quarter 2025 results that beat analyst estimates for both revenue and earnings and slightly raised its full-year guidance. Donaldson announced sales of $935.4 million, a 3.9% increase from the previous year. The company posted an adjusted earnings per share of $0.94, which was 13.3% higher year on year and surpassed expectations. Following the performance, Donaldson slightly boosted its full-year outlook, raising the midpoint for its adjusted earnings guidance to $4.03 per share.

Donaldson is up 2.7% since the beginning of the year, but at $92.40 per share, it is still trading 16.4% below its 52-week high of $110.57 from February 2026. Investors who bought $1,000 worth of Donaldson’s shares 5 years ago would now be looking at an investment worth $1,568.

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