Donaldson Company (NYSE: DCI) manufactures filtration systems. The Engine Products segment makes air intake, exhaust and liquid filtration systems for the construction, industrial, mining, agriculture and transportation markets. The Industrial Products segment provides dust, fume, and mist collectors and air filtration systems used in industrial gas turbines, computer disk drives and manufacturers' clean rooms. Caterpillar (NYSE: CAT) accounts for over ten percent of Donaldson's sales.

The company surprised investors last week, when it reported fiscal Q3 EPS of 57 cents and revenues of $587.8 million. Analysts had been looking for 51 cents and $540.4 million. Management also guided FY08 EPS to $2.08-$2.13, versus consensus of $2.07. Donaldson said it expects full-year industrial product sales to grow by 17-19%. Engine product sales were seen growing 11-13%.

Donaldson Company (NYSE: DCI) manufactures filtration devices. The Engine Products segment makes air intake, exhaust and liquid filtration systems for the construction, industrial, mining, agriculture and transportation markets. The Industrial Products segment provides dust, fume, and mist collectors and air filtration systems used in industrial gas turbines, computer disk drives and manufacturers' clean rooms. Caterpillar (NYSE: CAT) accounts for over 10 percent of Donaldson's sales.

The company pleased investors last week when it reported fiscal Q1 EPS of 53 cents and revenues of $525.6 million. Analysts had been looking for 48 cents and $484.8 million. The CEO cited international strength, in particular, for the solid numbers. Management also predicted FY08 EPS of $1.97-$2.07 ($1.99 consensus). The stock popped on the news and has since begun forming a bullish "pennant" consolidation pattern. Equities frequently exit pennants moving in the same direction they were traveling on entry. In this case, that would be to the upside.

Filtering the air and fluids associated with many industrial processes protects sensitive machinery and addresses a variety of important health and safety concerns. A leading provider of the systems used to deal with a broad spectrum of such problems is headquartered in Minneapolis.

Donaldson Company (NYSE: DCI) manufactures filtration systems. The Engine Products segment makes air intake, exhaust and liquid filtration systems for the construction, industrial, mining, agricultural and transportation markets. The Industrial Products segment provides dust, fume and mist collectors and air filtration systems used in industrial gas turbines, computer disk drives and manufacturers' clean rooms. Caterpillar (NYSE: CAT) accounts for over 10% of Donaldson's sales.

The company pleased investors early in the week, when it reported fiscal Q4 EPS of 53 cents and revenues of $524.7 million. Analysts had been looking for 49 cents and $500.6 million. Management also predicted FY08 EPS of $1.92-2.01 ($1.97 consensus).