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Dover Corporation (DOV - Free Report) reported first-quarter 2017 adjusted earnings per share from continuing operations of 70 cents, which increased 25% from 56 cents recorded in the prior-year quarter. Earnings also beat the Zacks Consensus Estimate of 62 cents.
Including one-time items, earnings came in at $1.09 per share, up from the prior-year figure of $0.64.
Total revenue increased 11.8% year over year to $1.813 billion in the quarter, which came ahead of the Zacks Consensus Estimate of $1.770 billion. The year-over-year increase was driven by acquisition growth of 12% and organic growth of 4%, partly offset by a 3% impact from dispositions, and an unfavorable impact from foreign exchange of 1%.
Costs and Margins
Cost of sales increased 11.5% year over year to $1.15 billion in the reported quarter. Gross profit rose 12% year over year to $661 million and subsequently gross margin expanded 20 basis points (bps) to 36.5%.
Selling, general and administrative expenses increased to $485.3 million from $443.4 million in the prior-year quarter. Operating profit grew 20.6% to $175.9 million from $145.8 million in the year-ago quarter. Operating margin expanded 70 bps to 9.7%.
Dover Corporation Price, Consensus and EPS Surprise
Energy revenues climbed 14% year over year to $324 million in the quarter. The segment reported an operating profit of $41.7 million, significantly up from $11.2 million recorded in the comparable period last year.
Revenues in the Engineered Systems segment increased to $607.6 million from $577 million in the year-ago quarter. The segment’s income surged 86% year over year to $174.4 million.
Revenues in the Fluids segment jumped 31.6% year over year to $525 million in the reported quarter. The segment’s income rose 14% year over year to $52.6million.
The Refrigeration & Food Equipment segment’s revenues edged down 1.8% to $356.8 million from $363.3 million recorded in the prior-year quarter. The segment reported an operating income of $33.6 million, down from $38.2 million in the year-earlier period.
Bookings and Backlog
Dover’s bookings at the end of the first quarter were worth $2.03 billion, up from $1.68 billion at the end of first-quarter 2016. Backlog also increased to $1.29 billion at the end of the reported quarter from $1.07 billion at the end of the year-ago quarter.
Financial Position
Dover generated free cash flow of $35.8 million in the first quarter compared with $96.2 million in the prior-year quarter. Cash flow from operations came in at $78.1 million in the reported quarter compared with $133.4 million in the year-ago quarter.
Outlook
Dover raised its revenue and EPS guidance for full-year 2017, driven by solid first-quarter performance, higher expectations in the Energy segment, and overall strong bookings activity. The company now guides earnings per share in range of $4.05–$4.20, up from the prior band of $3.40–$3.60 (excluding one-time items) for 2017.
The company also anticipates full-year revenue growth in the range of 11–13% compared with the previous outlook of 10–12%. The revised revenue forecast is primarily driven by a one-point increase in organic growth. The revenue growth guidance comprises organic growth of 4–6% and acquisition growth of approximately 10%, partially offset by a 2% impact from the dispositions and a 1% headwind from foreign exchange.
Share Price Performance
In the last one year, Dover underperformed the Zacks classified Machinery - General Industrial sub-industry with respect to price performance. The stock gained 18.9%, while the industry recorded growth of 23.5% over the same time frame.
ACCO Brands has an average positive earnings surprise of 24.74% for the trailing four quarters. Casella Waste generated an outstanding average positive earnings surprise of 165.21% in the past four quarters, while Parker-Hannifin has an average positive earnings surprise of 12.44% for the last four quarters.
Zacks' 2017 IPO Watch List
Before looking into the stocks mentioned above, you may want to get a head start on potential tech IPOs that are popping up on Zacks' radar. Imagine being in the first wave of investors to jump on a company with almost unlimited growth potential? This Special Report gives you the current scoop on 5 that may go public at any time.
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Dover (DOV) Tops Q1 Earnings & Revenues, Raises '17 View
Dover Corporation (DOV - Free Report) reported first-quarter 2017 adjusted earnings per share from continuing operations of 70 cents, which increased 25% from 56 cents recorded in the prior-year quarter. Earnings also beat the Zacks Consensus Estimate of 62 cents.
Including one-time items, earnings came in at $1.09 per share, up from the prior-year figure of $0.64.
Total revenue increased 11.8% year over year to $1.813 billion in the quarter, which came ahead of the Zacks Consensus Estimate of $1.770 billion. The year-over-year increase was driven by acquisition growth of 12% and organic growth of 4%, partly offset by a 3% impact from dispositions, and an unfavorable impact from foreign exchange of 1%.
Costs and Margins
Cost of sales increased 11.5% year over year to $1.15 billion in the reported quarter. Gross profit rose 12% year over year to $661 million and subsequently gross margin expanded 20 basis points (bps) to 36.5%.
Selling, general and administrative expenses increased to $485.3 million from $443.4 million in the prior-year quarter. Operating profit grew 20.6% to $175.9 million from $145.8 million in the year-ago quarter. Operating margin expanded 70 bps to 9.7%.
Dover Corporation Price, Consensus and EPS Surprise
Dover Corporation Price, Consensus and EPS Surprise | Dover Corporation Quote
Segmental Performance
Energy revenues climbed 14% year over year to $324 million in the quarter. The segment reported an operating profit of $41.7 million, significantly up from $11.2 million recorded in the comparable period last year.
Revenues in the Engineered Systems segment increased to $607.6 million from $577 million in the year-ago quarter. The segment’s income surged 86% year over year to $174.4 million.
Revenues in the Fluids segment jumped 31.6% year over year to $525 million in the reported quarter. The segment’s income rose 14% year over year to $52.6million.
The Refrigeration & Food Equipment segment’s revenues edged down 1.8% to $356.8 million from $363.3 million recorded in the prior-year quarter. The segment reported an operating income of $33.6 million, down from $38.2 million in the year-earlier period.
Bookings and Backlog
Dover’s bookings at the end of the first quarter were worth $2.03 billion, up from $1.68 billion at the end of first-quarter 2016. Backlog also increased to $1.29 billion at the end of the reported quarter from $1.07 billion at the end of the year-ago quarter.
Financial Position
Dover generated free cash flow of $35.8 million in the first quarter compared with $96.2 million in the prior-year quarter. Cash flow from operations came in at $78.1 million in the reported quarter compared with $133.4 million in the year-ago quarter.
Outlook
Dover raised its revenue and EPS guidance for full-year 2017, driven by solid first-quarter performance, higher expectations in the Energy segment, and overall strong bookings activity. The company now guides earnings per share in range of $4.05–$4.20, up from the prior band of $3.40–$3.60 (excluding one-time items) for 2017.
The company also anticipates full-year revenue growth in the range of 11–13% compared with the previous outlook of 10–12%. The revised revenue forecast is primarily driven by a one-point increase in organic growth. The revenue growth guidance comprises organic growth of 4–6% and acquisition growth of approximately 10%, partially offset by a 2% impact from the dispositions and a 1% headwind from foreign exchange.
Share Price Performance
In the last one year, Dover underperformed the Zacks classified Machinery - General Industrial sub-industry with respect to price performance. The stock gained 18.9%, while the industry recorded growth of 23.5% over the same time frame.
Zacks Rank
Dover currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the same sector are ACCO Brands Corporation (ACCO - Free Report) , Casella Waste Systems, Inc. (CWST - Free Report) and Parker-Hannifin Corporation (PH - Free Report) . All the three stocks flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
ACCO Brands has an average positive earnings surprise of 24.74% for the trailing four quarters. Casella Waste generated an outstanding average positive earnings surprise of 165.21% in the past four quarters, while Parker-Hannifin has an average positive earnings surprise of 12.44% for the last four quarters.
Zacks' 2017 IPO Watch List
Before looking into the stocks mentioned above, you may want to get a head start on potential tech IPOs that are popping up on Zacks' radar. Imagine being in the first wave of investors to jump on a company with almost unlimited growth potential? This Special Report gives you the current scoop on 5 that may go public at any time.
One has driven from 0 to a $68 billion valuation in 8 years. Four others are a little less obvious but already show jaw-dropping growth. Download this IPO Watch List today for free >>