UPDATE 1-Donaldson posts Q2 above Wall Street view

Wed Feb 24, 2010 5:39pm EST

* Q2 adj EPS $0.44 vs. est. $0.39

* Sees 2010 EPS $1.89-$2.09

* Raises div by 4 pct

Feb 24 (Reuters) - Air and liquid filtration maker Donaldson Co Inc (DCI.N) posted better-than-expected quarterly results, helped by cost reduction initiatives, forecast 2010 earnings above market view and raised dividend.

For the second quarter ended Jan. 31, the company posted earnings of $31 million, or 39 cents a share, compared with $33.8 million, or 43 cents a share, a year earlier.

Excluding pre-tax restructuring expenses of $5.1 million, Donaldson earned 44 cents a share.

Sales fell 5 percent to $436.1 million.

Analysts on average were expecting earnings of 39 cents a share, on revenue of $428.5 million, according to Thomson Reuters I/B/E/S.

The company forecast 2010 earnings of $1.89 to $2.09 a share, excluding restructuring charges, on sales of $1.8 billion. [ID:nWNAB1459]

Analysts were expecting earnings of $1.87 a share, on revenue of $1.8 billion for 2010.

Separately, Donaldson increased its quarterly cash dividend by 4 percent to 12 cents a share.

Shares of the company closed at $41.31 Wednesday on the New York Stock Exchange. (Reporting by Amulya Nagaraj in Bangalore; Editing by Unnikrishnan Nair)