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Dover (DOV) to Report Q3 Earnings: What's in the Cards?

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Dover Corporation (DOV - Free Report) is set to release third-quarter 2020 results, before the opening bell on Oct 20.

A Sneak Peek at Q2 Results

In the last reported quarter Dover’s earnings and sales beat their respective Zacks Consensus Estimates but declined year over year. The company has a trailing four-quarter average earnings surprise of 13.7%.

Which Way are Estimates Treading?

The Zacks Consensus Estimate for Dover’s third-quarter earnings per share is currently pinned at $1.31, calling for a year-over-year decline of 18.1%. The same for total revenues is pegged at $1,637 million, indicating a fall of 10.3% from the prior-year quarter. The Zacks Consensus Estimate for the September-end quarter’s earnings moved north over the past 30 days.

Let’s see how things have shaped up prior to this announcement.

Dover Corporation Price and EPS Surprise

Dover Corporation Price and EPS Surprise

Dover Corporation price-eps-surprise | Dover Corporation Quote

Earnings Whispers

Our proven model conclusively predicts an earnings beat for Dover this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: The Earnings ESP for Dover is +2.29%.

Zacks Rank: Dover currently carries a Zacks Rank of 3.

Key Factors

Dover’s third-quarter 2020 results are likely to reflect a solid order backlog across all of its business segments, possible improvement in demand as well as the company’s productivity and cost initiatives. The company has executed restructuring programs to better align costs and operations with the current market conditions through targeted facility consolidations, headcount reductions and other measures. These actions are likely to have boosted Dover’s July-September quarter margins.

However, weak oil and gas markets might have thwarted the Pumps & Process Solutions business during the September-end quarter. Meanwhile, solid demand for food and beverage, recovery in industrial pumps, as well as robust growth in the biopharma and hygiene markets are likely to have been conducive to the segment’s quarterly performance. Apart from this, Dover’s Imaging & Identification segment’s digital textile printing business is anticipated to have gained from the pick-up in textile consumable volumes and demand rebound in digital printing business during the quarter under review.

Dover’s Refrigeration & Food Equipment segment has lately been affected by the dismal food and retail construction markets. The segment’s SWEP heat-exchanger business has faced operational disruptions in Asia and demand reduction in the Heating, Ventilation, and Air Conditioning (HVAC) industry globally. These factors are likely to have dampened margins during the July-September period.

The company produces a wide range of specialized industrial products and manufacturing equipment, hence, recovery in the manufacturing sector over the past few months bode well for the company. Per the Institute for Supply Management, the U.S Manufacturing Purchasing Managers’ Index (PMI) was 55.4% in September following a 56% reading in August. Further, the index has been above 50 marks for four consecutive months, which denotes expansion in the manufacturing activities.

Share Price Performance

The company’s shares have gained 18.6%, over the past year, outperforming the industry’s growth of 10.8%.

Stocks Worth a Look

Here are few Industrial Product stocks which you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat in their upcoming releases:

AGCO Corporation (AGCO - Free Report) has an Earnings ESP of +6.07% and sports a Zacks Rank of 1, currently. You can see the complete list of today’s Zacks #1 Rank stocks here.

Lindsay Corporation (LNN - Free Report) , currently a Zacks #2 Ranked stock, has an Earnings ESP of +11.01%.

Avery Dennison Corporation (AVY - Free Report) carries a Zacks Rank #3 and has an Earnings ESP of +1.94%, at present.

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