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Dover (DOV) Beats Q2 Earnings Estimates, Hikes 2021 View

Dover Corporation DOV reported second-quarter 2021 adjusted earnings per share from continuing operations of $2.06, which beat the Zacks Consensus Estimate of $1.84. The figure surged 82% year over year. Robust order levels and margin improvement initiatives contributed to the company’s quarterly results.

On a reported basis, Dover delivered earnings per share of $1.82 in the June-end quarter, reflecting a year-over-year jump of 112%.

Total revenues in the second quarter increased 36% year over year to $2,032 million. The top line also surpassed the Zacks Consensus Estimate of $1,900 million.

Costs and Margins

Cost of sales rose 32.8% year over year to $1,259 million in the reported quarter. Gross profit increased 39.8% year over year to $772 million. Gross margin came in at 37.9% compared with the year-ago quarter’s 36.9%.

Selling, general and administrative expenses flared up 16.6% to $428 million from the prior-year quarter. Adjusted EBITDA increased 59.3% year over year to $467 million. Adjusted EBITDA margin was 22.9% in the April-June quarter compared with the prior-year quarter’s 19.5%.

Dover Corporation Price, Consensus and EPS Surprise

Dover Corporation price-consensus-eps-surprise-chart | Dover Corporation Quote

Segmental Performance

The Engineered Products segment revenues were up 29.2% year over year to $442 million in the June-end quarter. The segment’s adjusted operating income grew 28.8% year over year to $67 million.

The Fueling Solutions segment revenues climbed 34% to $437 million from the year-earlier quarter’s $326 million. The segment’s adjusted operating income jumped 66.6% year on year to $80 million.

The Imaging & Identification segment revenues increased 29% year over year to $294 million. The segment’s adjusted operating income rose 60.5% year over year to $61 million.

The Pumps & Process Solutions revenues grew 38.8% year over year to $429 million during the second quarter. The adjusted operating income for the segment came in at $139.5 million compared with the year-ago quarter’s $72.4 million.

The Refrigeration & Food Equipment segment’s revenues increased to $431 million from the year-earlier quarter’s $294 million. The segment’s adjusted operating income totaled $52 million, marking a year-over-year jump of 188.8%.

Bookings and Backlog

Dover’s bookings at the end of the second quarter were worth $2.37 billion compared with the prior-year quarter’s $1.41 billion. Backlog increased 69.1% year over year to $2.56 billion at the end of the reported quarter.

Financial Position

The company generated free cash flow of $218 million in the second quarter compared with the $233 million witnessed in the year-ago quarter. Cash flow from operations amounted to $260 million in the June-end quarter compared with the year-earlier quarter’s $272 million.

Outlook

Backed by stellar second-quarter 2021 results and the current demand scenario, the company is raising its adjusted earnings per share (EPS) and sales guidance for the current year. Dover now expects adjusted EPS to lie between $7.30 and $7.40, up from the prior projection of $6.75 and $6.85. Revenues are projected to register growth of 15-17% in 2021 compared with the earlier estimate of a 10-12% increase. The company is poised to gain from solid end-market demand, bookings rates and robust backlog.

Price Performance

Dover’s shares have gained 49.2% over the past year compared with the industry’s growth of 31.4%.


Image Source: Zacks Investment Research

Zacks Rank and Other Stocks to Consider

Dover currently carries a Zacks Rank #2 (Buy).

Other top-ranked stocks in the Industrial Products sector include Greif, Inc. GEF, Lindsay Corporation LNN and Pentair plc PNR. All of these stocks sport a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Greif has an anticipated earnings growth rate of 47.2% for fiscal 2021. The company’s shares have gained around 29.3%, year to date.

Lindsay has an estimated earnings growth rate of 1% for the ongoing fiscal year. Year to date, the company’s shares have rallied 29.1%.

Pentair has a projected earnings growth rate of 26% for the current year. The stock has appreciated around 29%, so far this year.


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