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Dover Corporation (DOV - Analyst Report) is slated to report its third-quarter 2012 results before the market opens on October 17. The Zacks Consensus Estimate for earnings for the quarter is $1.27 per share, representing an estimated year -over -year increase of 6.36%. Revenues, as per the Zacks Consensus Estimate, is $2.249 billion.

Second Quarter Synopsis

The company, in the second quarter, reported adjusted earnings of $1.15 per share, beating the Zacks Consensus Estimate of $1.14 and exceeding the year-ago earnings of $1.14.

Revenues in the reported quarter increased 8% year over year to $2.157 billion, missing the Zacks Consensus Estimate of $2.186 billion. The year- over- year improvement in the top line was driven by organic growth (3%) and acquisitions (7%), partly offset by unfavorable foreign currency impact (2%).

Estimate Revision Trend

Agreement

Out of the 12 analysts covering the stock, one has revised his/her estimate for the third quarter in the downward direction over the last 7 days with none moving in the opposite direction. Over the last 30 days, 6 analysts have lowered their estimates with none raising the same. A similar trend applies for 2012.  

Magnitude

The Zacks Consensus Estimate for the third quarter dropped by a penny over the last 7 days and by 4 cents over the last 30 days. For 2012, the Zacks Consensus Estimate fell by a penny over the last 7 days and by 6 cents over the last 30 days to $4.68 a share.

Earnings Surprise History

With respect to earnings surprises, Dover has topped the Zacks Consensus Estimate in all the last four quarters. The company has delivered an average positive earnings surprise of 4.22% over the preceding four quarters, implying that it has beaten the Zacks Consensus Estimate by that measure.

Our Take

Dover’s Energy segment has a high growth potential, driven by a soaring demand for its products and services. The company has a strong balance sheet and recently hiked its quarterly dividend by 11% to 35 cents a share adding value to the shareholders.

However, uncertain conditions in Europe, unfavorable foreign exchange rates and a slightly higher tax rate will be headwinds for the company. Moreover, it faces stiff competition from companies like Cooper Industries plc and Weatherford International Ltd. (WFT - Analyst Report).

Dover retains a short-term Zacks #4 Rank (Sell). We have a long-term Neutral recommendation on the stock.

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