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Dover Q3 Earnings Beat on Broad Demand, Margins Improve
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Key Takeaways
Dover's Q3 adjusted EPS rose 10% y/y to $2.88, beating estimates as revenues grew 7.5% to $2.23B.
Operating margin expanded to 18.8%, while bookings rose to $2.31B with orders up across all five segments.
Dover narrowed 2026 adjusted EPS view to $10.60-$10.75 and raised its organic revenue growth outlook to 5-6%.
Dover Corporation (DOV - Free Report) has reported third-quarter 2026 adjusted earnings of $2.88 per share, rising 10% year over year and beating the Zacks Consensus Estimate of $2.83 by 1.77%. The improvement reflected broad-based demand, higher revenues and operational execution.
On a reported basis, earnings from continuing operations were $2.50 per share, up 14% year over year.
Revenues increased 7.5% year over year to $2.23 billion, beating the Zacks Consensus Estimate of $2.20 billion by 1.47%. Organic revenues grew 7.1%. Our model expected organic revenues to rise 4%.
DOV's Margins Improve on Operational Execution
Cost of sales increased 6.9% year over year to $1.33 billion. Gross profit rose 8.4% to $903 million, while the gross margin improved to 40.4% from 40.1% in the prior-year quarter.
Selling, general and administrative expenses increased 6.1% to $484 million. Operating earnings advanced 11.1% to $419 million, while the operating margin expanded to 18.8% from 18.2%.
Total adjusted segment EBITDA increased 7.8% to $585 million. The related margin expanded 10 basis points to 26.2%, aided by productivity improvements, favorable product mix and volume leverage.
Dover Corporation Price, Consensus and EPS Surprise
The Engineered Products segment's revenues declined 1.7% year over year to $275 million. The figure missed our estimate of $289 million. Adjusted EBITDA decreased 1.5% to $62.3 million from $63.2 million. The figure beat our estimate of $73 million. Strong demand for aerospace and defense components was offset by lower volumes in European vehicle services.
The Clean Energy & Fueling segment's revenues increased 11.9% to $606 million, supported by clean energy components, fluid transport and North American retail fueling. The figure beat our estimate of $574 million. Adjusted EBITDA rose 11.3% to $141.6 million. The figure beat our estimate of $132 million. Volume leverage was partly offset by production ramp-up costs in cryogenic and space components.
The Imaging & Identification segment's revenues increased 1.9% to $304.7 million. The reported figure missed our projection of $315 million. Adjusted EBITDA rose 16.1% to $99.7 million from $85.9 million. The figure missed our estimate of $97 million. Double-digit growth in serialization software, along with steady demand for marking and coding products, supported the performance.
The Pumps & Process Solutions segment's revenues grew 3.2% year over year to $568.5 million but missed our estimate of $572 million. Adjusted EBITDA rose 5.5% to $192.9 million. The figure missed our estimate of $207 million. Growth in AI and energy infrastructure, single-use biopharma and industrial pumps supported revenues.
The Climate & Sustainability Technologies segment's revenues increased 17.9% year over year to $481.5 million, driven by strong shipments of global heat exchangers and carbon dioxide refrigeration systems. We had predicted revenues of $448 million for this segment. Adjusted EBITDA increased 5.9% to $88.5 million but missed our estimate of $97.8 million.
DOV's Bookings Signal Sustained Demand
Dover's bookings totaled $2.31 billion compared with $2 billion in the year-ago quarter. Orders increased across all five segments, resulting in a book-to-bill ratio of 1.03.
Climate & Sustainability Technologies recorded bookings of $594.1 million, up from $415.4 million. The company's trailing 12-month book-to-bill ratio reached 1.08. Approximately 50% of its consolidated backlog is scheduled for delivery in 2027, strengthening revenue visibility.
Dover's Cash Flow Strengthens in Q3
Cash flow from operating activities increased to $438.8 million from $424.2 million in the prior-year quarter. Capital expenditure increased to $55.4 million from $54.2 million.
For the first nine months, the free cash flow increased 11.4% to $702.9 million. Dover ended September with cash and cash equivalents of $1.69 billion.
The company repurchased approximately $330 million worth of shares during the quarter, demonstrating continued capital deployment.
DOV Narrows 2026 Earnings Guidance
Backed by favorable demand trends, Dover narrowed its 2026 adjusted earnings guidance to $10.60-$10.75 per share from the previously stated $10.55-$10.75.
Full-year revenue growth is projected at 7-8%, including organic growth of 5-6%, compared with the earlier projections of 6-8% and 4-6%, respectively.
The company expects the free cash flow to represent 14-16% of revenues, with capital expenditure projected at $200-$220 million. The company anticipates sustained demand momentum entering 2027.
Dover Stock’s Price Performance
The company’s shares have gained 19.2% in the past year compared with the industry’s growth of 4.5%.
Graco Inc.’s (GGG - Free Report) third-quarter 2026 adjusted earnings of 81 cents per share missed the Zacks Consensus Estimate of 82 cents. The bottom line grew from 73 cents in the year-ago quarter.
Graco’s revenues of $590 million surpassed the consensus estimate of $586 million. The top line increased from $543 million in third-quarter 2025.
2 Manufacturing Stocks Awaiting Results
Flowserve Corporation (FLS - Free Report) is scheduled to release third-quarter 2026 results on Oct. 28. The Zacks Consensus Estimate for FLS’s third-quarter 2026 earnings is pegged at 98 cents per share, suggesting year-over-year growth of 8.9%.
The Zacks Consensus Estimate for Flowserve Corp’s top line is pegged at $1.24 billion, indicating an increase of 5.3% from the prior year’s actual.
Applied Industrial Technologies, Inc. (AIT - Free Report) is scheduled to release first-quarter fiscal 2027 results on Oct. 27. The Zacks Consensus Estimate for AIT’s first-quarter 2027 earnings is pegged at $2.86 per share, suggesting year-over-year growth of 8.7%.
The Zacks Consensus Estimate for Applied Industrial’s top line is pegged at $1.30 billion, indicating an increase of 7.6% from the prior year’s actual.
View the Zacks #1 Rank List
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Dover Q3 Earnings Beat on Broad Demand, Margins Improve
Key Takeaways
Dover Corporation (DOV - Free Report) has reported third-quarter 2026 adjusted earnings of $2.88 per share, rising 10% year over year and beating the Zacks Consensus Estimate of $2.83 by 1.77%. The improvement reflected broad-based demand, higher revenues and operational execution.
On a reported basis, earnings from continuing operations were $2.50 per share, up 14% year over year.
Revenues increased 7.5% year over year to $2.23 billion, beating the Zacks Consensus Estimate of $2.20 billion by 1.47%. Organic revenues grew 7.1%. Our model expected organic revenues to rise 4%.
DOV's Margins Improve on Operational Execution
Cost of sales increased 6.9% year over year to $1.33 billion. Gross profit rose 8.4% to $903 million, while the gross margin improved to 40.4% from 40.1% in the prior-year quarter.
Selling, general and administrative expenses increased 6.1% to $484 million. Operating earnings advanced 11.1% to $419 million, while the operating margin expanded to 18.8% from 18.2%.
Total adjusted segment EBITDA increased 7.8% to $585 million. The related margin expanded 10 basis points to 26.2%, aided by productivity improvements, favorable product mix and volume leverage.
Dover Corporation Price, Consensus and EPS Surprise
Dover Corporation price-consensus-eps-surprise-chart | Dover Corporation Quote
Dover's Q3 Segmental Performances
The Engineered Products segment's revenues declined 1.7% year over year to $275 million. The figure missed our estimate of $289 million. Adjusted EBITDA decreased 1.5% to $62.3 million from $63.2 million. The figure beat our estimate of $73 million. Strong demand for aerospace and defense components was offset by lower volumes in European vehicle services.
The Clean Energy & Fueling segment's revenues increased 11.9% to $606 million, supported by clean energy components, fluid transport and North American retail fueling. The figure beat our estimate of $574 million. Adjusted EBITDA rose 11.3% to $141.6 million. The figure beat our estimate of $132 million. Volume leverage was partly offset by production ramp-up costs in cryogenic and space components.
The Imaging & Identification segment's revenues increased 1.9% to $304.7 million. The reported figure missed our projection of $315 million. Adjusted EBITDA rose 16.1% to $99.7 million from $85.9 million. The figure missed our estimate of $97 million. Double-digit growth in serialization software, along with steady demand for marking and coding products, supported the performance.
The Pumps & Process Solutions segment's revenues grew 3.2% year over year to $568.5 million but missed our estimate of $572 million. Adjusted EBITDA rose 5.5% to $192.9 million. The figure missed our estimate of $207 million. Growth in AI and energy infrastructure, single-use biopharma and industrial pumps supported revenues.
The Climate & Sustainability Technologies segment's revenues increased 17.9% year over year to $481.5 million, driven by strong shipments of global heat exchangers and carbon dioxide refrigeration systems. We had predicted revenues of $448 million for this segment. Adjusted EBITDA increased 5.9% to $88.5 million but missed our estimate of $97.8 million.
DOV's Bookings Signal Sustained Demand
Dover's bookings totaled $2.31 billion compared with $2 billion in the year-ago quarter. Orders increased across all five segments, resulting in a book-to-bill ratio of 1.03.
Climate & Sustainability Technologies recorded bookings of $594.1 million, up from $415.4 million. The company's trailing 12-month book-to-bill ratio reached 1.08. Approximately 50% of its consolidated backlog is scheduled for delivery in 2027, strengthening revenue visibility.
Dover's Cash Flow Strengthens in Q3
Cash flow from operating activities increased to $438.8 million from $424.2 million in the prior-year quarter. Capital expenditure increased to $55.4 million from $54.2 million.
For the first nine months, the free cash flow increased 11.4% to $702.9 million. Dover ended September with cash and cash equivalents of $1.69 billion.
The company repurchased approximately $330 million worth of shares during the quarter, demonstrating continued capital deployment.
DOV Narrows 2026 Earnings Guidance
Backed by favorable demand trends, Dover narrowed its 2026 adjusted earnings guidance to $10.60-$10.75 per share from the previously stated $10.55-$10.75.
Full-year revenue growth is projected at 7-8%, including organic growth of 5-6%, compared with the earlier projections of 6-8% and 4-6%, respectively.
The company expects the free cash flow to represent 14-16% of revenues, with capital expenditure projected at $200-$220 million. The company anticipates sustained demand momentum entering 2027.
Dover Stock’s Price Performance
The company’s shares have gained 19.2% in the past year compared with the industry’s growth of 4.5%.
DOV’s Zacks Rank
Dover currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Dover’s Peer Performance
Graco Inc.’s (GGG - Free Report) third-quarter 2026 adjusted earnings of 81 cents per share missed the Zacks Consensus Estimate of 82 cents. The bottom line grew from 73 cents in the year-ago quarter.
Graco’s revenues of $590 million surpassed the consensus estimate of $586 million. The top line increased from $543 million in third-quarter 2025.
2 Manufacturing Stocks Awaiting Results
Flowserve Corporation (FLS - Free Report) is scheduled to release third-quarter 2026 results on Oct. 28. The Zacks Consensus Estimate for FLS’s third-quarter 2026 earnings is pegged at 98 cents per share, suggesting year-over-year growth of 8.9%.
The Zacks Consensus Estimate for Flowserve Corp’s top line is pegged at $1.24 billion, indicating an increase of 5.3% from the prior year’s actual.
Applied Industrial Technologies, Inc. (AIT - Free Report) is scheduled to release first-quarter fiscal 2027 results on Oct. 27. The Zacks Consensus Estimate for AIT’s first-quarter 2027 earnings is pegged at $2.86 per share, suggesting year-over-year growth of 8.7%.
The Zacks Consensus Estimate for Applied Industrial’s top line is pegged at $1.30 billion, indicating an increase of 7.6% from the prior year’s actual.