What's in Store for Dover (DOV) This Earnings Season? - Analyst Blog

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Dover Corporation DOV is scheduled to report second-quarter 2015 results before the opening bell on Jul 21, 2015. Over the last four trailing quarters, the company generated a positive average earnings surprise of 2.00%. However, the company’s business currently faces headwinds from weak fundamentals in the North American oil & gas markets, which raises our concern. Let’s see how things are shaping up for this announcement.

Factors to Consider

Dover witnessed significant headwinds in energy-related markets which hampered its first-quarter 2015 results. Going forward, the company’s results will continue to bear the brunt of weak demand and significant customer inventory reductions in the North American Energy markets.

Dover recently trimmed its 2015 sales and earnings guidance citing continued weak fundamentals in the North American oil & gas markets. The company now expects earnings per share in the range of $3.75 to $3.90, compared with its prior expectation of $4.20 to $4.40. Sales are now projected to decline 8% to 9% for the year.

Notably, the company cautions that the second quarter has been impacted by reduced activity related to customer capital spending in retail refrigeration, oil & gas related pump markets and in industrial businesses within Engineered Systems.

Earnings Whispers

Our proven model does not conclusively state that Dover is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) for an earnings beat, which is not the case here as we will see below.

Zacks ESP: Dover has an Earnings ESP 0.00% as the Most Accurate estimate of $1.00 stands in line with the Zacks Consensus Estimate.

Zacks Rank: Dover’s Zacks Rank #5 (Strong Sell), when combined with an ESP of 0.00% makes prediction unlikely. We caution against stocks with Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing a negative estimate revisions.

Stocks to Consider

Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:

Caterpillar Inc. CAT with an Earnings ESP of 6.40% carries a Zacks Rank #1.

Rockwell Automation Inc. ROK has an Earnings ESP of 3.25% and a Zacks Rank #2.

Chart Industries Inc. GTLS with an Earnings ESP of 10.87% has a Zacks Rank #3.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
DOVER CORP (DOV): Free Stock Analysis Report
 
CATERPILLAR INC (CAT): Free Stock Analysis Report
 
ROCKWELL AUTOMT (ROK): Free Stock Analysis Report
 
CHART INDUSTRIE (GTLS): Free Stock Analysis Report
 
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