Advertisement
New Zealand markets open in 6 hours 8 minutes
  • NZX 50

    11,771.81
    +100.62 (+0.86%)
     
  • NZD/USD

    0.6124
    -0.0011 (-0.17%)
     
  • ALL ORDS

    8,012.10
    +1.60 (+0.02%)
     
  • OIL

    81.96
    +0.39 (+0.48%)
     
  • GOLD

    2,369.60
    +22.70 (+0.97%)
     

Why Is Dover Corporation (DOV) Down 4.1% Since Last Earnings Report?

A month has gone by since the last earnings report for Dover Corporation (DOV). Shares have lost about 4.1% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Dover Corporation due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Dover Earnings Beat Estimates in Q4, Revenues Rise Y/Y

Dover Corporation has reported fourth-quarter 2022 adjusted earnings per share (EPS) from continuing operations of $2.16, beating the Zacks Consensus Estimate of $2.15. The bottom line increased 21% year over year. Healthy demand and robust backlog rates, coupled with improving price-cost dynamics helped offset the impacts of the ongoing input shortages, inflationary cost pressure and foreign currency translation.

On a reported basis, Dover delivered earnings of $1.87 per share in the quarter, down 25% year over year.

Total revenues in the fourth quarter increased 7.5% year over year to $2,139 million. The top line surpassed the Zacks Consensus Estimate of $2,108 million. Organic growth was 9% in the quarter.

Costs and Margins

Cost of sales rose 8.3% year over year to $1,373 million in the reported quarter. Gross profit was up 6.2% year over year to $766 million. The gross margin was 35.8% compared with the year-ago quarter’s 36.2%.

Selling, general and administrative expenses were down 5.7% to $414 million from the prior-year quarter. Adjusted EBITDA increased 15% year over year to $484 million. The adjusted EBITDA margin was 22.6% in the quarter compared with the prior year quarter’s 21.2%.

Segmental Performance

The Engineered Products segment’s revenues were up 13.4% year over year to $525 million in the quarter. The segment’s adjusted EBITDA increased 57.1% year over year to $110 million.

The Clean Energy & Fueling segment’s revenues were $462 million compared with the prior-year quarter’s $411 million. The segment’s adjusted EBITDA was $98 million, up 21.3% from the prior-year quarter’s $80 million.

The Imaging & Identification segment’s revenues inched up 0.3% year over year to $293 million. The segment’s adjusted EBITDA rose 10.8% year over year to $77 million.

The Pumps & Process Solutions segment’s revenues decreased 6.5% year over year to $418 million in the fourth quarter. The adjusted EBITDA of the segment totaled $131 million, an 18.1% drop from the year-ago quarter’s figure of $160 million.

The Climate & Sustainability Technologies segment’s revenues increased to $442 million from $376 million reported in the year-ago quarter. The segment’s adjusted EBITDA totaled $68 million, a 61.9% improvement from the $42 million reported in fourth-quarter 2021.

Bookings and Backlog

Dover’s bookings at the end of the fourth quarter were worth $1.92 billion compared with the prior-year quarter’s $2.38 billion. Backlog decreased 6.8% year over year to $3.02 billion at the end of the reported quarter.

Financial Position

The company generated free cash flow of $284 million in the fourth quarter of 2022 compared with the year-ago quarter’s $277 million. Cash flow from operations amounted to $339 million in the quarter under review compared with the prior-year quarter’s $327 million.

2022 Performance

Dover reported an adjusted EPS of $8.45 in 2022 compared with $7.63 reported in the prior year. Earnings beat the Zacks Consensus Estimate of $8.44. Including one-time items, the bottom line was at $7.42, down 4% from the $7.74 reported in 2021.

Sales were up 7.6% year over year to $8.5 billion from the prior-year figure of $7.9 billion. The top line surpassed the Zacks Consensus Estimate of $8.48 billion.

Outlook

Dover expects adjusted EPS between $8.85 and $9.05 for 2023. It expects revenue growth of 3-5%.

ADVERTISEMENT

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates.

VGM Scores

Currently, Dover Corporation has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Dover Corporation has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Dover Corporation (DOV) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research