Dover Corp.
(
DOV
) has lowered its earnings guidance for 2012 to a band of
$4.70-$4.85 from the prior guidance of $4.80-$5.00. Uncertain
conditions in Europe, unfavorable foreign exchange rates and a
slightly higher tax rate have been cited as the reasons for the
downgrade.
Compared with the prior fiscal year's earnings of $4.26, Dover's
new guidance reflects annual growth of 10% to 14%, down from the
previous expectation of 13% to 17%. The Zacks Consensus Estimate
for 2012 is currently pegged at $4.88, above the company's guided
range.
In the first quarter of 2012, Dover reported earnings of $1.05 per
share, outperforming the Zacks Consensus Estimate of $1.01 and 19%
above the year-ago earnings of 88 cents per share. In fiscal 2011,
Dover had reported adjusted earnings of $4.26, lagging the Zacks
Consensus Estimate of $4.45 but climbing 26% over 2010.
Dover will release its second quarter results on July 18, 2012. The
company cautions that most of the brunt would be borne in the
second quarter of 2012. The Zacks Consensus Estimate for the
quarter is currently at $1.21, reflecting an annual climb of
11.65%. The company expects strength in the latter half of 2012 in
handset, refrigeration & food equipment, and energy markets to
offset weakness in a few of its other businesses.
Dover continues its strategy of growing through acquisitions to
improve its product offering and complement its organic growth
strategy. In 2011, Dover invested about $1.4 billion to acquire
nine businesses within its targeted markets of Communication
Components, Fluid, Refrigeration & Industrial, Energy, Printing
and Identification.
Dover has a significant exposure to the volatile semiconductor and
electronics end-markets through its Electronics Technologies
platform. Uncertainty in the economy impacting consumer spending
may affect the semiconductor market.
Exposure to weak European markets also remains a concern as the
region contributed 17% of Dover's total revenues in fiscal 2011. We
thus maintain our Neutral recommendation on Dover. The stock
retains a Zacks #4 Rank (short-term Sell recommendation).
Dover Corporation is an industrial conglomerate producing a wide
range of specialized industrial products and manufacturing
equipment. It operates primarily in the U.S. and has subsidiaries
and affiliates in Canada, France, Germany, the Netherlands, Sweden,
China and the United Kingdom. Dover caters to a diverse clientele
primarily spread across the Americas, Europe and Asia. Dover
competes with the likes of
Cooper Industries plc
(
CBE
),
Ingersoll-Rand Plc
(
IR
), and
Weatherford International Ltd.
(
WFT
).
COOPER INDS PLC (CBE): Free Stock Analysis
Report
DOVER CORP (DOV): Free Stock Analysis Report
INGERSOLL RAND (IR): Free Stock Analysis Report
WEATHERFORD INT (WFT): Free Stock Analysis
Report
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