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%.
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.
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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%.
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 >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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