DOV
$80.66
Dover
$1.34
1.69%
Earnings Details
1st Quarter March 2017
Thursday, April 20, 2017 6:50:00 AM
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Summary

Dover Beats

Dover (DOV) reported 1st Quarter March 2017 earnings of $0.70 per share on revenue of $1.8 billion. The consensus earnings estimate was $0.62 per share on revenue of $1.8 billion. The Earnings Whisper number was $0.60 per share. Revenue grew 11.8% on a year-over-year basis.

The company said it expects 2017 earnings of $4.05 to $4.20 per share on revenue of $7.54 billion to $7.67 billion. The company's previous guidance was earnings of $3.40 to $3.60 per share on revenue of $7.47 billion to $7.61 billion and the current consensus earnings estimate is $3.64 per share on revenue of $7.57 billion for the year ending December 31, 2017.

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
$0.70
Earnings Whisper
$0.60
Consensus Estimate
$0.62
Reported Revenue
$1.81 Bil
Revenue Estimate
$1.76 Bil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Dover Reports First Quarter 2017 Results And Raises Full Year Revenue And EPS Guidance

Dover (DOV) announced today that for the first quarter ended March 31, 2017, revenue was $1.8 billion, an increase of 12% from the prior year. The increase in the quarter was driven by acquisition growth of 12% and organic growth of 4%, partially offset by a 3% impact from dispositions and an unfavorable impact from foreign exchange ("FX") of 1%. Net earnings were $172.2 million, an increase of 73% as compared to $99.4 million for the prior year period. Diluted net earnings per share ("EPS") for the first quarter ended March 31, 2017, were $1.09, compared to $0.64 EPS in the prior year period, representing an increase of 70%. EPS for the first quarter of 2017 included a gain on a disposition of $0.39. EPS for the prior year period included a gain on a disposition of $0.07. Excluding these items, adjusted EPS for the first quarter of 2017 was $0.70, an increase of 25% from an adjusted EPS of $0.56 in the prior year period. EPS for the first quarter ended March 31, 2017, and March 31, 2016, include restructuring costs of $0.03 EPS and $0.07 EPS, respectively.

Dover’s President and Chief Executive Officer, Robert A. Livingston, said, "I am very pleased with our first quarter business activity and results. The revenue growth of 12% was broad-based and bookings grew 21%, resulting in a strong book-to-bill of 1.12. Of particular note, organic revenue and bookings grew 4% and 12%, respectively.

"Among the highlights in the quarter was an acceleration in the recovery of our U.S. drilling and production market. At the same time, business activity was also very solid in our printing & identification, retail fueling, and retail refrigeration markets, as well as the majority of our other industrial markets. Strong growth and solid execution, along with an improved tax rate, resulted in adjusted EPS of $0.70.

"As a result of the solid first quarter performance, higher expectations in Energy, and overall strong bookings activity, we are raising our full year revenue and EPS guidance. We now expect full year diluted earnings per share to be in the range of $4.05 to $4.20, versus our prior guidance of $3.40 to $3.60. Our revised guidance includes the gain from our recent disposition. Further, this revised guidance is based on full year revenue growth of 11% to 13% versus our prior forecast of 10% to 12%, and is comprised of organic growth of 4% to 6% and acquisition growth of approximately 10%, partially offset by a 2% impact from the dispositions and a 1% headwind from FX. Our revised revenue forecast is primarily driven by a one point increase in organic growth. The combined impact of acquisitions, dispositions, and FX is essentially unchanged from our prior forecast."

Dover will host a webcast of its first quarter 2017 conference call at 10:00 A.M. Eastern Time (9:00 A.M. Central Time) on Thursday, April 20, 2017. 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 first 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 exceeding $7 billion. We deliver innovative equipment and components, specialty systems, consumable supplies, software and digital solutions, and support services through four 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 29,000 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, as amended. Such statements concern future events and 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 address matters that are uncertain, including, by way of example only: operating and strategic plans, future sales, earnings, cash flows, margins, organic growth, growth from acquisitions, restructuring charges, cost structure, capital expenditures, capital allocation, capital structure, dividends, cash flows, exchange rates, tax rates, interest rates, interest expense, changes in operations and trends in industries in which our businesses operate, anticipated market conditions and our positioning, global economies, and operating improvements. 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, economic conditions generally and changes in economic conditions globally and in the markets and industries served by our businesses, including oil and gas activity and U.S. industrials activity; conditions and events affecting domestic and global financial and capital markets; oil and natural gas demand, production growth, and prices; changes in exploration and production spending by our customers and changes in the level of oil and natural gas exploration and development; changes in customer demand and capital spending; risks related to our international operations and the ability of our businesses to expand into new geographic markets; the impact of interest rate and currency exchange rate fluctuations; increased competition and pricing pressures; the impact of loss of a significant customer, or loss or non-renewal of significant contracts; the ability of our businesses to adapt to technological developments; the ability of our 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; the impact of loss of a single-source manufacturing facility; short-term capacity constraints; domestic and foreign governmental and public policy changes or developments, including import/export laws and sanctions, tax policies, environmental regulations and conflict minerals disclosure requirements; increases in the cost of raw materials; our ability to identify and successfully consummate value-adding acquisition opportunities or planned divestitures, and to realize anticipated earnings and synergies from acquired businesses and joint ventures; our 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 legal compliance risks and litigation, including product recalls; indemnification obligations related to acquired or divested businesses; cybersecurity and privacy risks; protection and validity of patent and other intellectual property rights; goodwill or intangible asset impairment charges; a downgrade in our credit ratings which, among other matters, could make obtaining financing more difficult and costly; and work stoppages, union and works council campaigns and other labor disputes which could impact our productivity. 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 - FIRST QUARTER 2017
DOVER CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS
(unaudited)(in thousands, except per share data)
Three Months Ended March 31,
2017
2016
Revenue
$
1,813,372
$
1,622,273
Cost of goods and services
1,152,198
1,033,009
Gross profit
661,174
589,264
Selling, general, and administrative expenses 485,290
443,448
Operating earnings
175,884
145,816
Interest expense
36,409
33,318
Interest income
(2,580)
(1,604)
Gain on sale of businesses
(90,093)
(11,228)
Other income, net
176
(2,294)
Earnings before provision for income taxes
231,972
127,624
Provision for income taxes
59,725
28,268
Net earnings
$
172,247
$
99,356
Net earnings per share:
Basic
$
1.11
$
0.64
Diluted
$
1.09
$
0.64
Weighted average shares outstanding:
Basic
155,540
155,064
Diluted
157,399
156,161
Dividends paid per common share
$
0.44
$
0.42
DOVER CORPORATION
QUARTERLY SEGMENT INFORMATION
(unaudited)(in thousands)
2017
2016
Q1
Q1
Q2
Q3
Q4
FY 2016
REVENUE
Energy
$
324,088
$ 283,230
$
259,008
$
273,248
$
292,952
$
1,108,438
Engineered Systems
Printing & Identification
249,238
239,681
263,648
253,091
266,082
1,022,502
Industrials
358,397
337,314
328,784
317,471
360,212
1,343,781
607,635
576,995
592,432
570,562
626,294
2,366,283
Fluids
525,195
399,062
405,838
412,822
482,852
1,700,574
Refrigeration & Food Equipment
356,834
363,252
429,386
451,328
376,373
1,620,339
Intra-segment eliminations
(380)
(266)
(319)
(197)
(510)
(1,292)
Total consolidated revenue
$
1,813,372
$ 1,622,273
$
1,686,345
$
1,707,763
$
1,777,961
$
6,794,342
NET EARNINGS
Segment Earnings:
Energy
$
41,691
$ 11,244
$
(75)
$
13,279
$
30,888
$
55,336
Engineered Systems
174,398
93,748
104,034
97,240
96,807
391,829
Fluids
52,639
46,047
54,033
66,178
34,663
200,921
Refrigeration & Food Equipment
33,562
38,161
63,230
64,111
118,126
283,628
Total segments
302,290
189,200
221,222
240,808
280,484
931,714
Corporate expense / other
36,489
29,862
24,566
26,638
31,674
112,740
Interest expense
36,409
33,318
33,779
33,789
35,515
136,401
Interest income
(2,580)
(1,604)
(1,622)
(795)
(2,738)
(6,759)
Earnings before provision for income taxes
231,972
127,624
164,499
181,176
216,033
689,332
Provision for income taxes
59,725
28,268
46,209
51,092
54,871
180,440
Net earnings
$
172,247
$ 99,356
$
118,290
$
130,084
$
161,162
$
508,892
SEGMENT MARGIN
Energy
12.9%
4.0%
--%
4.9%
10.5%
5.0%
Engineered Systems
28.7%
16.2%
17.6%
17.0%
15.5%
16.6%
Fluids
10.0%
11.5%
13.3%
16.0%
7.2%
11.8%
Refrigeration & Food Equipment
9.4%
10.5%
14.7%
14.2%
31.4%
17.5%
Total segment operating margin
16.7%
11.7%
13.1%
14.1%
15.8%
13.7%
DEPRECIATION AND AMORTIZATION EXPENSE
Energy
$
31,365
$ 34,160
$
33,289
$
32,605
$
31,366
$
131,420
Engineered Systems
19,575
16,036
16,075
16,238
25,597
73,946
Fluids
28,503
20,511
20,981
20,833
22,899
85,224
Refrigeration & Food Equipment
15,035
16,728
16,881
16,146
15,263
65,018
Corporate
1,120
1,169
868
901
2,193
5,131
Total depreciation and amortization expense $
95,598
$ 88,604
$
88,094
$
86,723
$
97,318
$
360,739
DOVER CORPORATION
QUARTERLY SEGMENT INFORMATION
(continued)
(unaudited)(in thousands)
2017
2016
Q1
Q1
Q2
Q3
Q4
FY 2016
BOOKINGS
Energy
$
348,317
$
273,445
$
246,021
$
270,685
$
299,771
$
1,089,922
Engineered Systems
Printing & Identification
256,665
242,569
266,490
248,443
268,951
1,026,453
Industrials
419,455
329,957
304,345
331,435
374,073
1,339,810
676,120
572,526
570,835
579,878
643,024
2,366,263
Fluids
565,987
418,345
413,767
413,535
457,283
1,702,930
Refrigeration & Food Equipment 438,576
411,367
468,661
429,134
336,645
1,645,807
Intra-segment eliminations
(1,149)
(90)
(944)
(245)
(308)
(1,587)
Total consolidated bookings
$
2,027,851
$
1,675,593
$
1,698,340
$
1,692,987
$
1,736,415
$
6,803,335
BACKLOG
Energy
$
156,255
$
144,828
$
129,873
$
126,519
$
134,181
Engineered Systems
Printing & Identification
109,347
102,640
104,509
101,190
98,924
Industrials
310,008
235,384
210,646
224,892
252,780
419,355
338,024
315,155
326,082
351,704
Fluids
371,717
286,457
315,786
318,246
331,238
Refrigeration & Food Equipment 341,530
303,479
332,312
309,462
258,329
Intra-segment eliminations
(729)
(36)
(265)
(252)
(102)
Total consolidated backlog
$
1,288,128
$
1,072,752
$
1,092,861
$
1,080,057
$
1,075,350
DOVER CORPORATION
QUARTERLY EARNINGS PER SHARE
(unaudited)(in thousands, except per share data*)
Earnings Per Share
2017
2016
Q1
Q1
Q2
Q3
Q4
FY 2016
Net earnings per share:
Basic
$
1.11
$
0.64
$
0.76
$
0.84
$
1.04
$
3.28
Diluted
$
1.09
$
0.64
$
0.76
$
0.83
$
1.03
$
3.25
Net earnings and weighted average shares used in calculated earnings per share amounts are as follows:
Net earnings
$
172,247
$
99,356
$
118,290
$
130,084
$
161,162
$
508,892
Weighted average shares outstanding:
Basic
155,540
155,064
155,180
155,300
155,376
155,231
Diluted
157,399
156,161
156,595
156,798
156,816
156,636
Adjusted Earnings Per Share (Non-GAAP)
Net earnings are adjusted by gains on disposition of businesses and a product recall charge to derive adjusted net earnings and adjusted diluted earnings per common share as follows:
2017
2016
Q1
Q1
Q2
Q3
Q4
FY 2016
Adjusted net earnings:
Net earnings
$
172,247
$
99,356
$
118,290
$
130,084
$
161,162
$
508,892
Gain on dispositions, net of tax
(61,720)
(11,228)
--
--
(56,975)
(68,203)
Product recall charge, net of tax --
--
--
--
14,237
14,237
Adjusted net earnings
$
110,527
$
88,128
$
118,290
$
130,084
$
118,424
$
454,926
Adjusted diluted earnings per common share:
Net earnings
$
1.09
$
0.64
$
0.76
$
0.83
$
1.03
$
3.25
Gain on dispositions, net of tax
(0.39)
(0.07)
--
--
(0.36)
(0.44)
Product recall charge, net of tax --
--
--
--
0.09
0.09
Adjusted net earnings
$
0.70
$
0.56
$
0.76
$
0.83
$
0.76
$
2.90
* Per share data may be impacted by rounding.
DOVER CORPORATION
ADDITIONAL INFORMATION
(unaudited)(in thousands)
Quarterly Cash Flow
2017
2016
Q1
Q1
Q2
Q3
Q4
FY 2016
Net Cash Flows Provided By (Used In):
Operating activities
$
78,071
$
133,413
$
207,868
$
231,665
$
289,029
$
861,975
Investing activities
81,780
(425,857)
(69,415)
(66,110)
(942,461)
(1,503,843)
Financing activities
(93,293)
178,507
(127,678)
98,491
484,288
633,608
Quarterly Free Cash Flow (Non-GAAP)
2017
2016
Q1
Q1
Q2
Q3
Q4
FY 2016
Cash flow from operating activities
$
78,071
$
133,413
$
207,868
$
231,665
$
289,029
$
861,975
Less: Capital expenditures
(42,259)
(37,230)
(35,422)
(43,116)
(49,437)
(165,205)
Free cash flow
$
35,812
$
96,183
$
172,446
$
188,549
$
239,592
$
696,770
Free cash flow as a percentage of revenue 2.0
%
5.9
%
10.2
%
11.0
%
13.5
% 10.3
%
Free cash flow as a percentage of net
20.8
%
96.8
%
145.8
%
144.9
%
148.7
% 136.9
%
earnings
Revenue Growth Factors
Three Months Ended March 31, 2017
Energy
Engineered Systems
Fluids
Refrigeration & Food Equipment
Total
Organic
15
%
2
%
(2) %
5
%
4
%
Acquisitions
--
%
9
%
35
%
--
%
12
%
Dispositions
--
%
(4)
%
--
%
(7)
%
(3)% %
Currency translation
(1)
%
(1)
%
(1) %
--
%
(1)% %
Total *
14
%
5
%
32
%
(2)%
12
%
* 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 net earnings represents net earnings adjusted for gains on disposition of businesses and a product recall charge. Adjusted diluted earnings per common share represents adjusted net earnings 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 and dispositions, provides a useful comparison of our revenue performance and trends between periods.

Investor Contact:
Media Contact:
Paul Goldberg
Adrian Sakowicz
Vice President - Investor Relations
Vice President - Communications
(212) 922-1640
(630) 743-5039
peg@dovercorp.com
asakowicz@dovercorp.com

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SOURCE Dover Corporation

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