DOV
$74.39
Dover
($1.14)
(1.51%)
Earnings Details
3rd Quarter September 2016
Wednesday, October 19, 2016 6:45:00 AM
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Summary

Dover Beats

Dover (DOV) reported 3rd Quarter September 2016 earnings of $0.87 per share on revenue of $1.7 billion. The consensus earnings estimate was $0.82 per share on revenue of $1.8 billion. The Earnings Whisper number was $0.83 per share. Revenue fell 4.5% compared to the same quarter a year ago.

The company said it continues to expect 2016 earnings of $3.00 to $3.05 per share. The current consensus earnings estimate is $2.93 per share for the year ending December 31, 2016.

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
$0.87
Earnings Whisper
$0.83
Consensus Estimate
$0.82
Reported Revenue
$1.71 Bil
Revenue Estimate
$1.77 Bil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Dover Reports Third Quarter 2016 Results

Dover (DOV) announced today that for the third quarter ended September 30, 2016, revenue was $1.7 billion, a decrease of 4% from the prior year. Organic revenue declined 7% and acquisition revenue, net of dispositions, provided 3% growth in the quarter. Earnings from continuing operations were $130.1 million, a decrease of 30% as compared to $186.5 million for the prior year period. Diluted earnings per share from continuing operations ("EPS") for the third quarter ended September 30, 2016, were $0.83, compared to $1.19 EPS in the prior year period, representing a decrease of 30%. Third quarter 2016 EPS of $0.83 decreased 27% as compared to third quarter 2015 adjusted EPS of $1.14, which excludes $0.05 of discrete tax benefits. There were no discrete tax benefits in the third quarter of 2016. EPS for the quarters ended September 30, 2016, and September 30, 2015, includes restructuring costs of $0.04 EPS and $0.05 EPS, respectively.

Revenue for the nine months ended September 30, 2016, was $5.0 billion, a decrease of 5% from the prior year, reflecting an organic revenue decline of 7% and an unfavorable impact from foreign exchange of 1%, offset by 3% growth from acquisition revenue, net of dispositions. Earnings from continuing operations for the nine months ended September 30, 2016, were $347.7 million, a decrease of 24% as compared to $459.3 million for the prior year period. Diluted EPS for the nine months ended September 30, 2016, was $2.22, compared to $2.87 EPS in the prior year period, representing a decrease of 23%. EPS from continuing operations for the nine months ended September 30, 2016, includes discrete tax benefits of $0.04 and a gain on disposition of $0.07. Excluding discrete tax benefits and the gain on disposition, adjusted EPS from continuing operations decreased 25% to $2.11 from a comparable EPS of $2.82 in the prior year period. EPS for the nine months ended September 30, 2016, and September 30, 2015, also includes restructuring costs of $0.14 EPS and $0.17 EPS, respectively.

Dover’s President and Chief Executive Officer, Robert A. Livingston, said, "Our third quarter results were disappointing. The continuing weak macro environment, further declines in longer cycle oil & gas exposed markets, and production inefficiencies in our retail refrigeration business impacted both volume and earnings. These results were well below our expectations, and more than offset solid improvements in our upstream drilling and production businesses, as well as continued strong performance in our Printing & Identification platform.

"As we announced on October 10, given these factors, we expect 2016 full year EPS to be in the range of $3.00 to $3.05. Within this guidance, organic revenue is forecasted to decline 7% to 8%.

"Regarding the fourth quarter, we expect further improvements in our early cycle upstream oil & gas markets, strong performance in Printing & Identification, and continued sequential growth in Fluids. We also expect a seasonal decline in Refrigeration & Food Equipment. These factors will result in our fourth quarter EPS to be largely in-line with the third quarter."

Net earnings for the third quarter ended September 30, 2016, were $130.1 million, or $0.83 EPS, compared to net earnings of $186.1 million, or $1.19 EPS, for the same period of 2015, which included earnings from discontinued operations of $0.4 million.

Net earnings for the nine months ended September 30, 2016, were $347.7 million, or $0.83 EPS, compared to net earnings of $728.0 million, or $1.19 EPS, for the same period of 2015, which included earnings from discontinued operations of $268.7 million, or $1.68 EPS. 2015 earnings from discontinued operations included gains of $265.6 million, or $1.66 EPS, resulting from the disposition of two businesses held for sale.

Dover will host a webcast of its third quarter 2016 conference call at 10:00 A.M. Eastern Time (9:00 A.M. Central Time) on Wednesday, October 19, 2016. The webcast can be accessed on the Dover website at www.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 also be found on the Company’s website.

About Dover:

Dover is a diversified global manufacturer with annual revenue approaching $7 billion. We deliver innovative equipment and components, specialty systems and support services through four major operating segments: Energy, 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 26,000 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 www.dovercorporation.com.

Forward-Looking Statements:

This press release contains "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Such statements relate to, among other things, operating and strategic plans, income, earnings, cash flows, foreign exchange, changes in operations, acquisitions, industries in which Dover businesses operate, anticipated market conditions and our positioning, global economies, and operating improvements. Forward-looking statements may be indicated by words or phrases such as "anticipates," "expects," "believes," "suggests," "will," "plans," "should," "would," "could," and "forecast", or the use of the future tense and similar words or phrases. Forward-looking statements are subject to inherent risks and uncertainties that could cause actual results to differ materially from current expectations, including, but not limited to, oil and natural gas demand, production growth, and prices; changes in exploration and production spending by Dover’s customers and changes in the level of oil and natural gas exploration and development; changes in customer demand and capital spending; economic conditions generally and changes in economic conditions globally and in markets served by Dover businesses, including well activity and U.S. industrials activity; Dover’s ability to achieve expected savings from integration and other cost-control initiatives, such as lean and productivity programs as well as efforts to reduce sourcing input costs; the impact of interest rate and currency exchange rate fluctuations; the ability of Dover’s businesses to expand into new geographic markets; Dover’s ability to identify and successfully consummate value-adding acquisition opportunities or planned divestitures; the impact of loss of a significant customer, or loss or non-renewal of significant contracts; the ability of Dover’s businesses to develop and launch new products, timing of such launches and risks relating to market acceptance by customers; the relative mix of products and services which impacts margins and operating efficiencies; increased competition and pricing pressures; the impact of loss of a single-source manufacturing facility; short-term capacity constraints; increases in the cost of raw materials; domestic and foreign governmental and public policy changes or developments, including environmental regulations, conflict minerals disclosure requirements, tax policies, trade sanctions, and export/import laws; protection and validity of patent and other intellectual property rights; the impact of legal matters and legal compliance risks; conditions and events affecting domestic and global financial and capital markets; and a downgrade in Dover’s credit ratings which, among other matters, could make obtaining financing more difficult and costly. Dover refers you to the documents that it files from time to time with the Securities and Exchange Commission, such as its reports on Form 10-K, Form 10-Q and Form 8-K, for a discussion of these and other risks and uncertainties that could cause its actual results to differ materially from its current expectations and from the forward-looking statements contained herein. Dover undertakes no obligation to update any forward-looking statement, except as required by law.

INVESTOR SUPPLEMENT - THIRD QUARTER 2016
DOVER CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS
(unaudited)(in thousands, except per share data)
Three Months Ended September 30,
Nine Months Ended September 30,
2016
2015
2016
2015
Revenue
$
1,707,763
$
1,787,582
$
5,016,381
$
5,261,711
Cost of goods and services
1,075,975
1,114,974
3,164,116
3,307,376
Gross profit
631,788
672,608
1,852,265
1,954,335
Selling and administrative expenses
421,042
395,688
1,301,901
1,233,017
Operating earnings
210,746
276,920
550,364
721,318
Interest expense, net
32,994
31,983
96,865
96,008
Other income, net
(3,424)
(367)
(19,800)
(5,810)
Earnings before provision for income taxes and
181,176
245,304
473,299
631,120
discontinued operations
Provision for income taxes
51,092
58,821
125,569
171,813
Earnings from continuing operations
130,084
186,483
347,730
459,307
Earnings (loss) from discontinued operations, net --
(385)
--
268,697
Net earnings
$
130,084
$
186,098
$
347,730
$
728,004
Basic earnings per common share:
Earnings from continuing operations
$
0.84
$
1.20
$
2.24
$
2.90
Earnings from discontinued operations, net
--
--
--
1.70
Net earnings
0.84
1.20
2.24
4.59
Weighted average shares outstanding
155,300
155,300
155,182
158,507
Diluted earnings per common share:
Earnings from continuing operations
$
0.83
$
1.19
$
2.22
$
2.87
Earnings from discontinued operations, net
--
--
--
1.68
Net earnings
0.83
1.19
2.22
4.55
Weighted average shares outstanding
156,798
156,560
156,562
160,112
Dividends paid per common share
$
0.44
$
0.42
$
1.28
$
1.22
DOVER CORPORATION
QUARTERLY SEGMENT INFORMATION
(unaudited)(in thousands)
2016
2015
Q1
Q2
Q3
Q3 YTD
Q1
Q2
Q3
Q3 YTD
Q4
FY 2015
REVENUE
Energy
$
283,230
$
259,008
$
273,248
$
815,486
$
430,423
$
366,044
$
363,872
$
1,160,339
$
323,341
$
1,483,680
Engineered Systems
Printing & Identification
239,681
263,648
253,091
756,420
230,181
229,934
227,992
688,107
255,563
943,670
Industrials
337,314
328,784
317,471
983,569
343,015
363,157
351,404
1,057,576
341,667
1,399,243
576,995
592,432
570,562
1,739,989
573,196
593,091
579,396
1,745,683
597,230
2,342,913
Fluids
399,062
405,838
412,822
1,217,722
340,236
351,511
352,018
1,043,765
355,508
1,399,273
Refrigeration & Food
363,252
429,386
451,328
1,243,966
372,097
448,115
492,460
1,312,672
418,758
1,731,430
Equipment
Intra-segment eliminations
(266)
(319)
(197)
(782)
(451)
(133)
(164)
(748)
(237)
(985)
Total consolidated revenue
$
1,622,273
$
1,686,345
$
1,707,763
$
5,016,381
$
1,715,501
$
1,758,628
$
1,787,582
$
5,261,711
$
1,694,600
$
6,956,311
NET EARNINGS
Segment Earnings:
Energy
$
11,244
$
(75)
$
13,279
$
24,448
$
52,305
$
40,909
$
48,726
$
141,940
$
31,250
$
173,190
Engineered Systems
93,748
104,034
97,240
295,022
88,149
96,702
102,866
287,717
89,244
376,961
Fluids
46,047
54,033
66,178
166,258
54,634
70,168
74,911
199,713
62,404
262,117
Refrigeration & Food
38,161
63,230
64,111
165,502
36,150
65,732
76,665
178,547
42,752
221,299
Equipment
Total segments
189,200
221,222
240,808
651,230
231,238
273,511
303,168
807,917
225,650
1,033,567
Corporate expense / other
29,862
24,566
26,638
81,066
34,526
20,382
25,881
80,789
24,911
105,700
Interest expense, net
31,714
32,157
32,994
96,865
32,037
31,988
31,983
96,008
31,249
127,257
Earnings from continuing
127,624
164,499
181,176
473,299
164,675
221,141
245,304
631,120
169,490
800,610
operations before provision
for income taxes
Provision for income taxes
28,268
46,209
51,092
125,569
47,485
65,507
58,821
171,813
32,916
204,729
Earnings from continuing
99,356
118,290
130,084
347,730
117,190
155,634
186,483
459,307
136,574
595,881
operations
Earnings (loss) from
--
--
--
--
92,320
176,762
(385)
268,697
5,251
273,948
discontinued operations, net
Net earnings
$
99,356
$
118,290
$
130,084
$
347,730
$
209,510
$
332,396
$
186,098
$
728,004
$
141,825
$
869,829
SEGMENT OPERATING MARGIN
Energy
4.0
% --
% 4.9
% 3.0
%
12.2
% 11.2
% 13.4
% 12.2
%
9.7
% 11.7
%
Engineered Systems
16.2
% 17.6
% 17.0
% 17.0
%
15.4
% 16.3
% 17.8
% 16.5
%
14.9
% 16.1
%
Fluids
11.5
% 13.3
% 16.0
% 13.7
%
16.1
% 20.0
% 21.3
% 19.1
%
17.6
% 18.7
%
Refrigeration & Food
10.5
% 14.7
% 14.2
% 13.3
%
9.7
% 14.7
% 15.6
% 13.6
%
10.2
% 12.8
%
Equipment
Total segment operating
11.7
% 13.1
% 14.1
% 13.0
%
13.5
% 15.6
% 17.0
% 15.4
%
13.3
% 14.9
%
margin
DEPRECIATION AND AMORTIZATION EXPENSE
Energy
$
34,160
$
33,289
$
32,605
$
100,054
$
34,427
$
32,740
$
31,858
$
99,025
$
42,754
$
141,779
Engineered Systems
16,036
16,075
16,238
48,349
14,526
14,392
14,503
43,421
16,493
59,914
Fluids
20,511
20,981
20,833
62,325
13,848
13,648
13,367
40,863
15,215
56,078
Refrigeration & Food
16,728
16,881
16,146
49,755
16,458
16,406
16,609
49,473
16,601
66,074
Equipment
Corporate
1,169
868
901
2,938
923
841
837
2,601
643
3,244
Total depreciation and
$
88,604
$
88,094
$
86,723
$
263,421
$
80,182
$
78,027
$
77,174
$
235,383
$
91,706
$
327,089
amortization expense
DOVER CORPORATION
QUARTERLY SEGMENT INFORMATION
(continued)
(unaudited)(in thousands)
2016
2015
Q1
Q2
Q3
Q3 YTD
Q1
Q2
Q3
Q3 YTD
Q4
FY 2015
BOOKINGS
Energy
$
273,445
$
246,021
$
270,685
$
790,151
$
416,628
$
345,079
$
351,557
$
1,113,264
$
315,996
$
1,429,260
Engineered Systems
Printing & Identification
242,569
266,490
248,443
757,502
235,617
224,203
226,756
686,576
250,639
937,215
Industrials
329,957
304,345
331,435
965,737
337,070
336,173
338,744
1,011,987
357,451
1,369,438
572,526
570,835
579,878
1,723,239
572,687
560,376
565,500
1,698,563
608,090
2,306,653
Fluids
418,345
413,767
413,535
1,245,647
339,310
333,695
357,032
1,030,037
321,154
1,351,191
Refrigeration & Food
411,367
468,661
429,134
1,309,162
419,659
486,793
430,681
1,337,133
379,967
1,717,100
Equipment
Intra-segment eliminations
(90)
(944)
(245)
(1,279)
(628)
(417)
(385)
(1,430)
(486)
(1,916)
Total consolidated bookings $
1,675,593
$
1,698,340
$
1,692,987
$
5,066,920
$
1,747,656
$
1,725,526
$
1,704,385
$
5,177,567
$
1,624,721
$
6,802,288
BACKLOG
Energy
$
144,828
$
129,873
$
126,519
$
212,060
$
194,819
$
156,631
$
155,586
Engineered Systems
Printing & Identification
102,640
104,509
101,190
108,151
103,403
100,476
98,288
Industrials
235,384
210,646
224,892
276,598
248,592
236,298
250,725
338,024
315,155
326,082
384,749
351,995
336,774
349,013
Fluids
286,457
315,786
318,246
259,504
240,389
236,608
243,459
Refrigeration & Food
303,479
332,312
309,462
337,084
373,193
307,351
247,352
Equipment
Intra-segment eliminations
(36)
(265)
(252)
(595)
(354)
(598)
(808)
Total consolidated backlog
$
1,072,752
$
1,092,861
$
1,080,057
$
1,192,802
$
1,160,042
$
1,036,766
$
994,602
DOVER CORPORATION
QUARTERLY EARNINGS PER SHARE
(unaudited)(in thousands, except per share data*)
Earnings Per Share
2016
2015
Q1
Q2
Q3
Q3 YTD
Q1
Q2
Q3
Q3 YTD
Q4
FY 2015
Basic earnings (loss) per common share:
Continuing operations
$
0.64
$
0.76
$
0.84
$
2.24
$
0.72
$
0.98
$
1.20
$
2.90
$
0.88
$
3.78
Discontinued operations --
--
--
--
0.57
1.11
--
1.70
0.03
1.74
Net earnings
$
0.64
$
0.76
$
0.84
$
2.24
$
1.30
$
2.10
$
1.20
$
4.59
$
0.92
$
5.52
Diluted earnings (loss) per common share:
Continuing operations
$
0.64
$
0.76
$
0.83
$
2.22
$
0.72
$
0.97
$
1.19
$
2.87
$
0.87
$
3.74
Discontinued operations --
--
--
--
0.57
1.10
--
1.68
0.03
1.72
Net earnings
$
0.64
$
0.76
$
0.83
$
2.22
$
1.28
$
2.07
$
1.19
$
4.55
$
0.91
$
5.46
Net earnings (loss) and average shares used in calculated earnings (loss) per share amounts are as follows:
Net earnings (loss):
Continuing operations
$
99,356
$
118,290
$
130,084
$
347,730
$
117,190
$
155,634
$
186,483
$
459,307
$
136,574
$
595,881
Discontinued operations --
--
--
--
92,320
176,762
(385)
268,697
5,251
273,948
Net earnings
$
99,356
$
118,290
$
130,084
$
347,730
$
209,510
$
332,396
$
186,098
$
728,004
$
141,825
$
869,829
Average shares outstanding:
Basic
155,064
155,180
155,300
155,182
161,650
158,640
155,300
158,507
154,986
157,619
Diluted
156,161
156,595
156,798
156,562
163,323
160,398
156,560
160,112
156,254
159,172
Adjusted Earnings Per Share (Non-GAAP)
Earnings from continuing operations are adjusted by gains (losses) from discrete and other tax items and gain on disposition of business to derive
adjusted earnings from continuing operations and adjusted diluted earnings per common share as follows:
2016
2015
Q1
Q2
Q3
Q3 YTD
Q1
Q2
Q3
Q3 YTD
Q4
FY 2015
Adjusted earnings from continuing operations:
Earnings from continuing operations $
99,356
$
118,290
$
130,084
$
347,730
$
117,190
$
155,634
$
186,483
$
459,307
$
136,574
$
595,881
Gains (losses) from discrete and
7,348
(1,221)
(304)
5,823
--
--
8,131
8,131
9,382
17,513
other tax items
Gain on disposition of business
11,228
--
--
11,228
--
--
--
--
--
--
Adjusted earnings from continuing
$
80,780
$
119,511
$
130,388
$
330,679
$
117,190
$
155,634
$
178,352
$
451,176
$
127,192
$
578,368
operations
Adjusted diluted earnings per common share:
Earnings from continuing operations $
0.64
$
0.76
$
0.83
$
2.22
$
0.72
$
0.97
$
1.19
$
2.87
$
0.87
$
3.74
Gains (losses) from discrete and
0.05
(0.01)
--
0.04
--
--
0.05
0.05
0.06
0.11
other tax items
Gain on disposition of business
0.07
--
--
0.07
--
--
--
--
--
--
Adjusted earnings from continuing
$
0.52
$
0.76
$
0.83
$
2.11
$
0.72
$
0.97
$
1.14
$
2.82
$
0.81
$
3.63
operations
* Per share data may not add due to rounding.
DOVER CORPORATION
ADDITIONAL INFORMATION
(unaudited)(in thousands)
Quarterly Cash Flow
2016
2015
Q1
Q2
Q3
Q3 YTD
Q1
Q2
Q3
Q3 YTD
Q4
FY 2015
Net Cash Flows Provided By
(Used In):
Operating activities
$
133,413
$
207,868
$
231,665
$
572,946
$
131,332
$
218,911
$
282,213
$
632,456
$
316,603
$
949,059
Investing activities
(425,857)
(69,415)
(66,110)
(561,382)
156,585
457,875
(33,454)
581,006
(615,584)
(34,578)
Financing activities
178,507
(127,678)
98,491
149,320
(416,603)
(608,329)
(86,033)
(1,110,965)
19,079
(1,091,886)
Quarterly Free Cash Flow (Non-GAAP)
2016
2015
Q1
Q2
Q3
Q3 YTD
Q1
Q2
Q3
Q3 YTD
Q4
FY 2015
Cash flow from operating
$
133,413
$
207,868
$
231,665
$
572,946
$
131,332
$
218,911
$
282,213
$
632,456
$
316,603
$
949,059
activities
Less: Capital expenditures
(37,230)
(35,422)
(43,116)
(115,768)
(27,956)
(43,807)
(39,516)
(111,279)
(42,972)
(154,251)
Free cash flow
$
96,183
$
172,446
$
188,549
$
457,178
$
103,376
$
175,104
$
242,697
$
521,177
$
273,631
$
794,808
Free cash flow as a
96.8
% 145.8
% 144.9
% 131.5
%
88.2
% 112.5
% 130.1
% 113.5
%
200.4
% 133.4
%
percentage of earnings from
continuing operations
Free cash flow as a
5.9
% 10.2
% 11.0
% 9.1
%
6.0
% 10.0
% 13.6
% 9.9
%
16.1
% 11.4
%
percentage of revenue
Revenue Growth Factors
Three Months Ended September 30, 2016
Energy
Engineered
Fluids
Refrigeration
Total
Systems
& Food
Equipment
Organic (decline) growth (24) %
1
%
(9) %
(2)
%
(7) %
Acquisitions
--
%
3
%
27
%
--
%
6
%
Dispositions
--
%
(5)
%
--
%
(7)
%
(3) %
Currency translation
(1)
%
(1)
%
(1) %
--
%
(1) %
(25) %
(2)
%
17
%
(9)
%
(5) %
Nine Months Ended September 30, 2016
Energy
Engineered
Fluids
Refrigeration
Total
Systems
& Food
Equipment
Organic (decline) growth (29) %
2
%
(7) %
1
%
(7) %
Acquisitions
--
%
3
%
25
%
--
%
6
%
Dispositions
--
%
(4)
%
--
%
(6)
%
(3) %
Currency translation
(1)
%
(1)
%
(1) %
--
%
(1) %
(30) %
--
%
17
%
(5)
%
(5) %

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 earnings from continuing operations, 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 earnings from continuing operations, 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 gains or losses from discrete and other tax items and for gain on disposition of business. Adjusted diluted earnings per common share represents adjusted earnings from continuing operations divided by average diluted shares. Management believes this information is useful to investors to better understand the company’s ongoing profitability and facilitates easier comparisons of the company’s profitability to prior and future periods and to its peers. 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, provides a useful comparison of our revenue performance and trends between periods.

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/dover-reports-third-quarter-2016-results-300347357.html

SOURCE Dover

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