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Dover (DOV) Earnings & Revenues Top Estimates in Q3, Up Y/Y

Zacks Equity Research

Dover Corporation DOV reported third-quarter 2019 adjusted earnings per share from continuing operations of $1.60. The figure improved 18% from the prior-year quarter’s $1.36 per share. Earnings also beat the Zacks Consensus Estimate of $1.53.

On a reported basis, Dover delivered earnings per share of $1.40 in the third quarter, up 33% year over year. Earnings included acquisition-related amortization costs of 17 cents and rightsizing costs of 2 cents.

Total revenues in the quarter came in at $1,825 million, suggesting growth of 4.5% from the year-ago quarter’s $1,747 million, backed by organic growth of 5.6% and acquisition growth of 1%. This was partly offset by a 1.6% unfavorable foreign-exchange impact. The revenue figure surpassed the Zacks Consensus Estimate of $1,811 million.

Costs and Margins

Cost of sales grew 4.7% to $1,152 million in the September-end quarter. Gross profit increased 4.2% year over year to $673.4 million.

Selling, general and administrative expenses slipped 8.3% to $390.7 million from the $426.4 million reported in the prior-year quarter. Operating profit increased to $282.7 million from the year-ago quarter’s reported tally of $220 million.

Dover Corporation Price, Consensus and EPS Surprise

Dover Corporation Price, Consensus and EPS Surprise

Dover Corporation price-consensus-eps-surprise-chart | Dover Corporation Quote

Segmental Performance

The Engineered Systems segment revenues went up to $701.7 million from $671.5 million recorded in the year-ago quarter. The segment’s income increased 25% year over year to $136 million.

The Fluids segment revenues climbed 9.1% year over year to $753 million in the quarter. The segment income jumped 44% year over year to $145.5 million.

The Refrigeration & Food Equipment segment’s revenues declined 4.1% to $370 million from the year-ago quarter’s reported figure of $386 million. The segment’s operating income also dropped 17% year over year to $35.2 million.

Bookings and Backlog

Dover’s bookings at the end of the third quarter were worth $1.81 billion, down from $1.71 billion recorded at the end of third-quarter 2018. Backlog increased 3.5% year over year to $1.38 billion at the end of the reported quarter.

Financial Position

Dover generated free cash flow of $304.7 million during the July-September quarter compared with the $205.7 million recorded in the prior-year quarter. Cash flow from operations came in at $350.8 million in the reported quarter compared with the $244 million witnessed in the year-ago period.

Outlook

Backed by solid third-quarter performance, Dover tightened its adjusted earnings per share guidance to $5.82-$5.85 from the prior estimate of $5.75-$5.85 for full-year 2019.

Share Price Performance

Over the past year, Dover’s shares have appreciated 14.8% compared with the industry’s growth of 10.6%.

 



Zacks Rank and Stocks to Consider

Dover currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the Industrial Products sector are Atkore International Group Inc ATKR, Cintas Corporation CTAS and Sharps Compliance Corp SMED, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Atkore International Group has a projected earnings growth rate of 19.8% for the current year. The stock has gained 62.9% so far this year.

Cintas has an estimated earnings growth rate of 12.74% for 2019. Shares of the company have rallied 58.9% year to date.

Sharps Compliance has an expected earnings growth rate of a whopping 500% for 2019. The company has gained 21.5% so far this year.

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