DOV
$79.29
Dover
($1.40)
(1.74%)
Earnings Details
3rd Quarter September 2018
Thursday, October 18, 2018 6:45:00 AM
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Summary

Dover Beats

Dover (DOV) reported 3rd Quarter September 2018 earnings of $1.36 per share on revenue of $1.7 billion. The consensus earnings estimate was $1.29 per share on revenue of $1.8 billion. The Earnings Whisper number was $1.31 per share. Revenue fell 12.9% compared to the same quarter a year ago.

The company said it expects 2018 earnings of $4.80 to $4.85 per share on revenue of approximately $7.99 billion. The company's previous guidance was earnings of $4.75 to $4.85 per share on revenue of $7.99 billion to $8.06 billion and the current consensus earnings estimate is $4.82 per share on revenue of $6.97 billion for the year ending December 31, 2018.

Dover Corp owns and operates a portfolio of manufacturing companies providing components and equipment, specialty systems and support services for a variety of applications in the industrial products, engineered systems, fluid management.

Results
Reported Earnings
$1.36
Earnings Whisper
$1.31
Consensus Estimate
$1.29
Reported Revenue
$1.75 Bil
Revenue Estimate
$1.76 Bil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Dover Reports Third Quarter 2018 Results

DOWNERS GROVE, Ill., Oct. 18, 2018 /PRNewswire/ -- Dover (NYSE: DOV), a diversified global manufacturer, announced its financial results for the third quarter ended September 30, 2018.

Third Quarter 2018 Financial Results:

For the third quarter ended September 30, 2018, Dover's revenue was $1.7 billion, driven by organic growth of 3%. Net earnings for the third quarter ended September 30, 2018, were $157.3 million, compared to net earnings of $178.9 million in the prior year period. The third quarter 2017 results include earnings from discontinued operations of $19.5 million attributable to Apergy, which the company spun off in the second quarter of 2018.

Earnings from continuing operations were $157.3 million, a decrease of 1% as compared to $159.5 million for the prior year period, largely driven by forecasted rightsizing costs incurred in the period. Diluted earnings per share from continuing operations ("EPS") on a GAAP basis for the third quarter ended September 30, 2018, were $1.05, compared to $1.01 for the comparable period.

For the third quarter ended September 30, 2018, earnings from continuing operations included acquisition-related amortization costs of $26.2 million and rightsizing costs of $19.7 million, representing $0.18 EPS and $0.13 EPS, respectively. Excluding these costs, adjusted earnings from continuing operations for the third quarter ended September 30, 2018, was $203.2 million (+9%), and adjusted EPS was $1.36 (+14%).

A reconciliation between GAAP and adjusted earnings from continuing operations is included as an exhibit herein.

Full Year 2018 Guidance Update:

Dover tightened its guidance for adjusted diluted earnings per share from continuing operations to the upper end of the previous range, and is now $4.80 to $4.85. This guidance is based on full year revenue growth of approximately 2%, which is comprised of organic growth of 3%, acquisition growth of 1%, and a favorable impact from FX of 1%, partially offset by a 3% impact from dispositions.

Dover's 2018 guidance for adjusted EPS from continuing operations excludes forecasted full year acquisition-related amortization costs and rightsizing and other costs. Dover expects its full year effective tax rate to be between 20% and 21%.

Management Commentary:

Dover's President and Chief Executive Officer, Richard J. Tobin, said, "Dover's solid results reflect broad-based demand strength in Engineered Systems and Fluids, which posted organic growth of 5% and 9%, respectively, and more than offset the forecasted weak demand conditions in Refrigeration & Food Equipment. In all, we generated revenue of $1.7 billion at an organic growth rate of 3%. Adjusted net earnings of $203 million and adjusted EPS of $1.36 improved 9% and 14%, respectively.

"Heading into the fourth quarter, demand trends remain largely unchanged across the portfolio, with third quarter organic bookings growth of 6% over the comparable period. In the fourth quarter, we expect our Fluids segment to be a more meaningful contributor to our profits as a result of top line growth conversion and improved operational performance in our retail fueling operations. This, coupled with our cost containment actions, will more than offset weaker demand conditions in our Refrigeration & Food Equipment segment, which are expected to continue through the balance of the year.

"We are on track to complete our rightsizing initiatives as disclosed at our September investor day, and have made good progress in our footprint optimization projects, some of which we expect to begin to implement in the fourth quarter. On the back of our solid order book, productivity improvements and internal cost initiatives, we are tightening our full year EPS guidance to $4.80 to $4.85, which represents the top end of the previous range."

Conference Call Information:

Dover will host a webcast and conference call to discuss its third quarter 2018 results and 2018 guidance at 10:00 A.M. Eastern Time (9:00 A.M. Central Time) on Thursday, October 18, 2018. The webcast can be accessed on the Dover website at dovercorporation.com. The conference call will also be made available for replay on the website. Additional information on Dover's third quarter results and its operating segments can be found on the Company's website.

About Dover:

Dover is a diversified global manufacturer with annual revenue of approximately $7 billion. We deliver innovative equipment and components, specialty systems, consumable supplies, software and digital solutions, and support services through three operating segments: Engineered Systems, Fluids and Refrigeration & Food Equipment. Dover combines global scale with operational agility to lead the markets we serve. Recognized for our entrepreneurial approach for over 60 years, our team of over 24,000 employees takes an ownership mindset, collaborating with customers to redefine what's possible. Headquartered in Downers Grove, Illinois, Dover trades on the New York Stock Exchange under "DOV." Additional information is available at dovercorporation.com.

Forward-Looking Statements:

This press release contains "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements in this document other than statements of historical fact are statements that are, or could be deemed, "forward-looking" statements. Some of these statements may be indicated by words such as "may", "anticipate", "expect", believe", "intend", "guidance", "estimates", "suggest", "will", "plan", "should", "would", "could", "forecast" and other words and terms that use the future tense or have a similar meaning. Forward-looking statements are based on current expectations and are subject to numerous important risks, uncertainties, assumptions and other factors, some of which are beyond the Company's control. Factors that could cause actual results to differ materially from current expectations include, among other things, general economic conditions and conditions in the particular markets in which we operate, changes in customer demand and capital spending, competitive factors and pricing pressures, our ability to develop and launch new products in a cost-effective manner, our ability to identify and complete acquisitions and integrate and realize synergies from newly acquired businesses, the impact of interest rate and currency exchange rate fluctuations, capital allocation plans and changes in those plans, including with respect to dividends, share repurchases, investments in research and development, capital expenditures and acquisitions, changes in law, including the effect of U.S. tax reform and developments with respect to trade policy and tariffs, our ability to derive expected benefits from restructuring, productivity initiatives and other cost reduction actions, changes in sourcing input costs or the supply of input materials, the impact of legal compliance risks and litigation, including with respect to product quality and safety, cybersecurity and privacy, our ability to capture and protect intellectual property rights, and various other factors that are described in the Company's periodic reports filed with or furnished to the Securities and Exchange Commission, including our Annual Report on Form 10-K/A for the year ended December 31, 2017. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.

 

 

INVESTOR SUPPLEMENT - THIRD QUARTER 2018


DOVER CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS
(unaudited)(in thousands, except per share data)




Three Months Ended
September 30,


Nine Months Ended
September 30,


2018


2017


2018


2017

Revenue

$

1,747,403



$

1,747,775



$

5,183,168



$

5,068,356


Cost of goods and services

1,100,883



1,098,582



3,268,583



3,189,202


Gross profit

646,520



649,193



1,914,585



1,879,154


Selling, general, and administrative expenses

426,445



410,040



1,290,246



1,257,027


Operating earnings

220,075



239,153



624,339



622,127


Interest expense

31,192



35,372



98,957



108,585


Interest income

(2,060)



(1,759)



(6,680)



(6,669)


Gain on sale of businesses







(90,093)


Other (income) expense, net

(2,073)



(1,236)



(6,641)



(1,407)


Earnings before provision for income taxes

193,016



206,776



538,703



611,711


Provision for income taxes

35,711



47,321



105,533



154,693


Earnings from continuing operations

157,305



159,455



433,170



457,018


Earnings (loss) from discontinued operations, net



19,457



(4,472)



58,199


Net earnings

$

157,305



$

178,912



$

428,698



$

515,217










Basic earnings per share:








Earnings from continuing operations

$

1.07



$

1.02



$

2.87



$

2.94


Earnings (loss) from discontinued operations, net



0.12



(0.03)



0.37


Net earnings

$

1.07



$

1.15



$

2.84



$

3.31










Weighted average shares outstanding

147,344



155,757



151,177



155,668


Diluted earnings per common share:








Earnings from continuing operations

$

1.05



$

1.01



$

2.82



$

2.90


Earnings (loss) from discontinued operations, net



0.12



(0.03)



0.37


Net earnings

$

1.05



$

1.14



$

2.79



$

3.27










Weighted average shares outstanding

149,457



157,555



153,429



157,565










Dividends paid per common share

$

0.48



$

0.47



$

1.42



$

1.35










 

 

DOVER CORPORATION
QUARTERLY SEGMENT INFORMATION
(unaudited)(in thousands)




2018


2017


Q1

Q2

Q3

Q3 YTD


Q1

Q2

Q3

Q3 YTD

REVENUE










Engineered Systems










Printing & Identification

$

282,522


$

299,834


$

283,232


$

865,588



$

249,238


$

278,220


$

272,941


$

800,399


Industrials

389,104


403,155


388,302


1,180,561



379,634


400,065


398,058


1,177,757



671,626


702,989


671,534


2,046,149



628,872


678,285


670,999


1,978,156












Fluids

628,098


693,666


690,065


2,011,829



597,645


633,252


638,068


1,868,965












Refrigeration & Food Equipment

338,235


401,766


386,214


1,126,215



356,834


426,304


438,788


1,221,926












Intra-segment eliminations

(288)


(327)


(410)


(1,025)



(141)


(470)


(80)


(691)


Total consolidated revenue

$

1,637,671


$

1,798,094


$

1,747,403


$

5,183,168



$

1,583,210


$

1,737,371


$

1,747,775


$

5,068,356












NET EARNINGS










Segment Earnings:










Engineered Systems

$

102,066


$

126,649


$

108,714


$

337,429



$

177,207


$

110,103


$

102,767


$

390,077


Fluids

67,348


93,028


101,207


261,583



67,172


91,465


103,052


261,689


Refrigeration & Food Equipment

29,182


51,372


42,434


122,988



33,562


65,829


65,413


164,804


Total segments

198,596


271,049


252,355


722,000



277,941


267,397


271,232


816,570


Corporate expense / other

30,763


30,050


30,207


91,020



37,282


34,818


30,843


102,943


Interest expense

35,640


32,125


31,192


98,957



36,359


36,854


35,372


108,585


Interest income

(2,057)


(2,563)


(2,060)


(6,680)



(2,575)


(2,335)


(1,759)


(6,669)


Earnings before provision for income
taxes

134,250


211,437


193,016


538,703



206,875


198,060


206,776


611,711


Provision for income taxes

24,841


44,981


35,711


105,533



51,787


55,585


47,321


154,693


Earnings from continuing operations

109,409


166,456


157,305


433,170



155,088


142,475


159,455


457,018


Earnings (loss) from discontinued
operations, net

22,025


(26,497)



(4,472)



17,159


21,583


19,457


58,199


Net earnings

$

131,434


$

139,959


$

157,305


$

428,698



$

172,247


$

164,058


$

178,912


$

515,217












SEGMENT MARGIN








Engineered Systems

15.2

%

18.0

%

16.2

%

16.5

%


28.2

%

16.2

%

15.3

%

19.7

%

Fluids

10.7

%

13.4

%

14.7

%

13.0

%


11.2

%

14.4

%

16.2

%

14.0

%

Refrigeration & Food Equipment

8.6

%

12.8

%

11.0

%

10.9

%


9.4

%

15.4

%

14.9

%

13.5

%

Total segment operating margin

12.1

%

15.1

%

14.4

%

13.9

%


17.6

%

15.4

%

15.5

%

16.1

%











DEPRECIATION AND AMORTIZATION EXPENSE








Engineered Systems

$

19,239


$

19,203


$

18,204


$

56,646



$

20,598


$

21,272


$

23,150


$

65,020


Fluids

34,449


34,981


34,954


104,384



32,454


33,362


34,211


100,027


Refrigeration & Food Equipment

13,579


13,524


13,533


40,636



15,035


14,522


14,093


43,650


Corporate

1,358


1,595


1,399


4,352



1,133


1,252


1,079


3,464


Total depreciation and amortization
expense

$

68,625


$

69,303


$

68,090


$

206,018



$

69,220


$

70,408


$

72,533


$

212,161













 

 

DOVER CORPORATION
QUARTERLY SEGMENT INFORMATION
(continued)
(unaudited)(in thousands)




2018


2017


Q1

Q2

Q3

Q3 YTD


Q1

Q2

Q3

Q3 YTD

BOOKINGS










Engineered Systems










Printing & Identification

$

284,437


$

306,770


$

271,367


$

862,574



$

256,664


$

282,158


$

268,700


$

807,522


Industrials

466,722


412,780


390,606


1,270,108



444,058


392,816


390,254


1,227,128



751,159


719,550


661,973


2,132,682



700,722


674,974


658,954


2,034,650












Fluids

703,461


737,340


723,996


2,164,797



638,801


631,350


655,305


1,925,456












Refrigeration & Food
Equipment

372,701


428,816


331,979


1,133,496



438,576


466,276


357,855


1,262,707












Intra-segment eliminations

(624)


33


(549)


(1,140)



(1,093)


(397)


(339)


(1,829)












Total consolidated bookings

$

1,826,697


$

1,885,739


$

1,717,399


$

5,429,835



$

1,777,006


$

1,772,203


$

1,671,775


$

5,220,984












BACKLOG










Engineered Systems










Printing & Identification

$

135,915


$

137,019


$

126,609




$

109,347


$

115,763


$

116,359



Industrials

376,474


372,525


367,963




327,180


321,315


316,835




512,389


509,544


494,572




436,527


437,078


433,194













Fluids

544,250


564,959


588,632




434,274


438,445


462,471













Refrigeration & Food
Equipment

283,250


309,440


255,783




341,530


382,598


302,574













Intra-segment eliminations

(389)


(134)


(58)




(725)


(268)


(174)













Total consolidated backlog

$

1,339,500


$

1,383,809


$

1,338,929




$

1,211,606


$

1,257,853


$

1,198,065



 

 

DOVER CORPORATION
QUARTERLY EARNINGS PER SHARE
(unaudited)(in thousands, except per share data*)



Earnings Per Share











2018


2017


Q1

Q2

Q3

Q3 YTD


Q1

Q2

Q3

Q3 YTD

Basic earnings (loss) per common share:








Continuing operations

$

0.71


$

1.10


$

1.07


$

2.87



$

1.00


$

0.92


$

1.02


$

2.94


Discontinued operations

0.14


(0.17)



(0.03)



0.11


0.14


0.12


0.37


Net earnings

$

0.85


$

0.92


$

1.07


$

2.84



$

1.11


$

1.05


$

1.15


$

3.31












Diluted earnings (loss) per common share:








Continuing operations

$

0.70


$

1.08


$

1.05


$

2.82



$

0.99


$

0.90


$

1.01


$

2.90


Discontinued operations

0.14


(0.17)



(0.03)



0.11


0.14


0.12


0.37


Net earnings

$

0.84


$

0.91


$

1.05


$

2.79



$

1.09


$

1.04


$

1.14


$

3.27












Net earnings (loss) and weighted average shares used in calculated earnings per share amounts are as follows:

Net earnings (loss):










Continuing operations

$

109,409


$

166,456


$

157,305


$

433,170



$

155,088


$

142,475


$

159,455


$

457,018


Discontinued operations

22,025


(26,497)



(4,472)



17,159


21,583


19,457


58,199


Net earnings

$

131,434


$

139,959


$

157,305


$

428,698



$

172,247


$

164,058


$

178,912


$

515,217












Weighted average shares outstanding:








Basic

154,520


151,744


147,344


151,177



155,540


155,703


155,757


155,668


Diluted

157,090


153,938


149,457


153,429



157,399


157,513


157,555


157,565












* Per share data may be impacted by rounding.

 

 

Non-GAAP Reconciliations


Adjusted Earnings Per Share (Non-GAAP)

Earnings from continuing operations are adjusted by the effect of acquisition-related amortization, gains on disposition of businesses, disposition costs, and rightsizing and other costs to derive
adjusted earnings from continuing operations and adjusted diluted earnings per common share as follows:




2018


2017


Q1

Q2

Q3

Q3 YTD


Q1

Q2

Q3

Q3 YTD

Adjusted earnings:







Earnings from continuing operations

$

109,409


$

166,456


$

157,305


$

433,170



$

155,088


$

142,475


$

159,455


$

457,018

Acquisition-related amortization, pre-tax 1

38,150

38,072


34,997


111,219



38,996


37,620


37,553


114,169

Acquisition-related amortization, tax impact 2

(9,716)

(9,683)


(8,785)


(28,184)



(12,777)


(12,027)


(12,171)


(36,975)

Gain on dispositions, pre-tax 3





(88,402)




(88,402)

Gain on dispositions, tax impact 2





26,682




26,682

Disposition costs, pre-tax 4







3,314


3,314

Disposition costs, tax impact 2







(964)


(964)

Rightsizing and other costs, pre-tax 5

4,371

6,808


24,201


35,380






Rightsizing and other costs, tax impact 2

(797)

(1,448)


(4,477)


(6,722)






Adjusted earnings from continuing operations

$

141,417


$

200,205


$

203,241


$

544,863



$

119,587


$

168,068


$

187,187


$

474,842











Adjusted diluted earnings per common share*:








Diluted earnings per share from continuing operations

$

0.70


$

1.08


$

1.05


$

2.82



$

0.99


$

0.90


$

1.01


$

2.90

Acquisition-related amortization, pre-tax 1

0.24

0.25


0.23


0.72



0.25


0.24


0.24


0.72

Acquisition-related amortization, tax impact 2

(0.06)

(0.06)


(0.06)


(0.18)



(0.08)


(0.08)


(0.08)


(0.23)

Gain on dispositions, pre-tax 3





(0.56)




(0.56)

Gain on dispositions, tax impact 2





0.17




0.17

Disposition costs, pre-tax 4







0.02


0.02

Disposition costs, tax impact 2







(0.01)


(0.01)

Rightsizing and other costs, pre-tax 5

0.03

0.04


0.16


0.23






Rightsizing and other costs, tax impact 2

(0.01)

(0.01)


(0.03)


(0.04)






Adjusted diluted earnings per share from continuing operations

$

0.90


$

1.30


$

1.36


$

3.55



$

0.76


$

1.07


$

1.19


$

3.01


1 Includes amortization on acquisition-related intangible assets and inventory step-up.

2 Adjustments were tax effected using the statutory tax rates in the applicable jurisdictions or the effective tax rate, where applicable, for each period.

3 Includes a gain from the sale of Performance Motorsports International in the first quarter of 2017.

4 Disposition costs include costs related to the sale of Warn Industries, Inc. in the fourth quarter of 2017.

5 Rightsizing and other costs include actions taken on employee reductions, facility consolidations and site closures and product line divestitures and exits.

* Per share data and totals may be impacted by rounding.

 

 

DOVER CORPORATION
ADDITIONAL INFORMATION
(unaudited)(in thousands)


Quarterly Cash Flow



2018


2017


Q1

Q2

Q3

Q3 YTD


Q1

Q2

Q3

Q3 YTD

Net Cash Flows Provided By
(Used In):










Operating activities

$

15,535


$

159,205


$

243,944


$

418,684



$

45,726


$

152,506


$

255,765


$

453,997


Investing activities

(122,597)


(51,606)


(35,922)


(210,125)



86,429


(46,460)


(47,584)


(7,615)


Financing activities

(289,103)


(227,734)


(232,476)


(749,313)



(93,293)


(216,273)


(197,635)


(507,201)


 

Quarterly Free Cash Flow (Non-GAAP)



2018


2017


Q1

Q2

Q3

Q3 YTD


Q1

Q2

Q3

Q3 YTD

Cash flow from operating
activities

$

15,535


$

159,205


$

243,944


$

418,684



$

45,726


$

152,506


$

255,765


$

453,997


Less: Capital expenditures

(44,678)


(51,686)


(38,192)


(134,556)



(36,931)


(42,035)


(51,396)


(130,362)


Free cash flow

$

(29,143)


$

107,519


$

205,752


$

284,128



$

8,795


$

110,471


$

204,369


$

323,635












Free cash flow as a percentage
of revenue

(1.8)

%

6.0

%

11.8

%

5.5

%


0.6

%

6.4

%

11.7

%

6.4

%











Free cash flow as a percentage
of earnings from continuing
operations

(26.6)

%

64.6

%

130.8

%

65.6

%


5.7

%

77.5

%

128.2

%

70.8

%

 

Revenue Growth Factors



Three Months Ended September 30, 2018


Engineered
Systems


Fluids


Refrigeration
& Food
Equipment


Total

Organic

5.2

%


9.1

%


(8.8)

%


3.1

%

Acquisitions

%


0.5

%


0.3

%


0.3

%

Dispositions

(4.9)

%


(0.2)

%


(3.3)

%


(2.8)

%

Currency translation

(0.2)

%


(1.3)

%


(0.2)

%


(0.6)

%

Total **

0.1

%


8.1

%


(12.0)

%


%









** Totals may be impacted by rounding.








 


Nine Months Ended September 30, 2018


Engineered
Systems


Fluids


Refrigeration
& Food
Equipment


Total

Organic

6.3

%


5.6

%


(7.2)

%


2.8

%

Acquisitions

0.2

%


0.6

%


0.5

%


0.4

%

Dispositions

(5.7)

%


(0.2)

%


(2.2)

%


(2.8)

%

Currency translation

2.6

%


1.6

%


1.1

%


1.9

%

Total *

3.4

%


7.6

%


(7.8)

%


2.3

%









* Totals may be impacted by rounding.








 

Non-GAAP Disclosures

In an effort to provide investors with additional information regarding our results as determined by GAAP, Management also discloses non-GAAP information that Management believes provides useful information to investors. Adjusted net earnings, adjusted diluted earnings per common share, free cash flow, and organic revenue growth are not financial measures under GAAP and should not be considered as a substitute for net earnings, diluted earnings per common share, cash flows from operating activities, or revenue as determined in accordance with GAAP, and they may not be comparable to similarly titled measures reported by other companies.

Adjusted earnings from continuing operations represents earnings from continuing operations adjusted for the effect of acquisition-related amortization, gains on disposition of businesses, disposition costs, and rightsizing and other costs. We exclude after-tax acquisition-related amortization because the amount and timing of such charges are significantly impacted by the timing, size, number and nature of the acquisitions the Company consummates. We exclude the other items because they occur for reasons that may be unrelated to the Company's commercial performance during the period and/or Management believes they are not indicative of the Company's ongoing operating costs or gains in a given period. Management believes this information is useful to investors to better understand the Company's ongoing profitability as it will better reflect the Company's core operating results, offer more transparency and facilitate easier comparability to prior and future periods and to its peers. Adjusted diluted earnings per common share represents adjusted net earnings divided by average diluted shares.

Free cash flow represents net cash provided by operating activities minus capital expenditures. Management believes that free cash flow is an important measure of operating performance because it provides management and investors a measurement of cash generated from operations that is available for mandatory payment obligations and investment opportunities, such as funding acquisitions, paying dividends, repaying debt and repurchasing our common stock.

Management believes that reporting organic revenue growth, which excludes the impact of foreign currency exchange rates and the impact of acquisitions and dispositions, provides a useful comparison of our revenue performance and trends between periods.

 

Cision View original content:http://www.prnewswire.com/news-releases/dover-reports-third-quarter-2018-results-300733527.html

SOURCE Dover Corporation