Donaldson (NYSE: DCI) reported Q3 EPS of $0.45. Revenue for the quarter came in at $60.1 million versus the consensus estimate of $59.23 million.

GUIDANCE:

Donaldson sees FY2017 EPS of $1.67-$1.71.

Fiscal 2017 Outlook

Donaldson expects full-year 2017 adjusted EPS between $1.67 and $1.71, compared with prior guidance of $1.60 to $1.68. Fiscal 2017 GAAP EPS will be approximately 5 cents higher than adjusted EPS, reflecting the benefit from the Northern Technical, L.L.C. escrow settlement that occurred in first quarter 2017.

The Company expects fiscal 2017 sales will increase from 2016 by approximately 6 percent, compared with prior guidance for sales to grow between 2 percent and 4 percent. The full-year sales guidanceincludes a negative impact from currency translation of approximately $8.5 million and a benefit of $6 million from the recent acquisition of Hy-Pro Filtration.

Full-year 2017 sales in the Engine Products segment are now expected to increase from 2016 by 10 percent to 11 percent, compared with prior guidance of 5 percent to 7 percent. The year-over-year improvement in Engine is driven by growth in Aftermarket, Off-Road, and Aerospace and Defense, partially offset by a decline in On-Road. Additionally, the Engine guidance includes a benefit of approximately $6 million from Hy-Pro. Full-year 2017 sales of Industrial Products are expected to decline between 3 percent and 2 percent, compared with a decline between 3 percent and 1 percent in prior guidance. The year-over-year change in Industrial sales reflects declines in Gas Turbine Systems and Special Applications, partially offset by growth in Industrial Filtration Solutions.

Donaldson expects full-year 2017 operating margin between 14.0 percent and 14.4 percent, an increase of 0.2 percentage points when comparing the midpoints of the current and prior guidance ranges. The fiscal 2017 effective income tax rate is forecast between 27.7 percent and 28.7 percent, and other income is now expected between $10 million and $15 million.

Full-year 2017 capital expenditures are forecast between $60 million and $70 million and cash conversion is expected between 100 percent and 110 percent, compared with prior guidance of 105 percent to 115 percent. Donaldson expects to repurchase between 2 percent and 3 percent of its outstanding shares during fiscal 2017.

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