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Dover's (DOV) Earnings and Sales Surpass Estimates in Q3

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Dover Corporation (DOV - Free Report) recorded third-quarter 2020 adjusted earnings per share from continuing operations of $1.60, beating the Zacks Consensus Estimate of $1.31. The bottom-line figure remained flat year over year.

On a reported basis, Dover delivered earnings per share of $1.38 in the September-end quarter, reflecting a year-over-year decline of 1.4%.

Total revenues in the third quarter came in at $1,748 million, marking a decline of 4% from the year-ago quarter. The revenue figure, however, surpassed the Zacks Consensus Estimate of $1,637 million.

Costs and Margins

Cost of sales fell 5.5% year over year to $1,089 million during the July-September quarter. Gross profit dipped 2% year over year to $659 million. Gross margin came in at 37.8% compared with the year-ago quarter’s 36.8%.

Selling, general and administrative expenses slipped 2.3% to $382 million from the prior-year quarter. Operating profit decreased to $277 million from the year-ago quarter’s $283 million. Operating margin came in at 15.8% compared with the year-ago quarter’s 15.5%.

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 Products segment revenues went down to $387 million from the $427 million recorded in the year-ago quarter. The segment’s income decreased 12.2% year over year to $65 million.

The Fueling Solutions segment revenues declined to $380 million from the year-earlier quarter’s $412 million. The segment’s income edged down 1.5% year over year to $67 million.

The Imaging & Identification segment revenues fell to $266 million from the prior-year quarter’s $275 million. The segment’s income dropped 16.2% year over year to $52 million.

The Pumps & Process Solutions revenues climbed 2% year over year to $348 million in the third quarter. The segment income came in at $89.8 million compared with the year-ago quarter’s $77.4 million.

The Refrigeration & Food Equipment segment’s revenues declined to $368 million from the year-earlier quarter’s $370 million. The segment’s operating income declined 14.3% year over year to $40 million.

Bookings and Backlog

Dover’s bookings at the end of the third quarter were worth $1.80 billion compared with prior-year quarter’s $1.81 billion. Backlog increased 14.3% year over year to $1.58 billion at the end of the reported quarter.

Financial Position

Dover generated free cash flow of $295 million in the third quarter compared with the prior-year quarter’s $305 million. Cash flow from operations came in at $339 million in the September-end quarter compared with the year-ago quarter’s $351 million.

Outlook

Dover has raised the current-year adjusted earnings per share guidance on solid year-to-date margin performance and strong order backlog. The company now expects adjusted earnings per share in between $5.40 and $5.45 compared with the prior guidance of $5.00-$5.25.

Price Performance

Dover’s shares have gained 9% over the past year, outperforming the industry’s growth of 8.5%.



Zacks Rank and Stocks to Consider

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

Some better-ranked stocks in the Industrial Products sector include Sealed Air Corporation (SEE - Free Report) , Lawson Products, Inc. (LAWS - Free Report) and Fortune Brands Home & Security, Inc. (FBHS - Free Report) , each carrying a Zacks Rank of 2, currently. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Sealed Air has a projected earnings growth rate of 3.9% for the current year. Shares of the company have gained 46.9% over the past six months.

Lawson Products has an estimated earnings growth rate of 3.4% for 2020. The company’s shares have rallied 59.8% in the past six months.

Fortune Brands has an expected earnings growth rate of 6.9% for the ongoing year. In the past six months, the stock has surged 105.7%.

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