) reported first-quarter 2013 adjusted earnings from continuing
operations of $1.10 per share, beating the Zacks Consensus
Estimate of $1.08 and also exceeding the prior-year quarter's
earnings of $1.01 per share.
On a reported basis, earnings from continuing operations were
$1.12 per share compared with the prior-year quarter earnings of
$1.00. Earnings in the reported quarter include the impact of
discrete tax items of 2 cents per share recognized in the current
quarter and 1 cent per share recognized in the prior-year
Revenues and Margins
Total revenue was $2.04 billion in reported quarter, up 4% year
over year, falling short of the Zacks Consensus Estimate of $2.09
billion. The growth includes a 6% contribution from acquisitions,
offset by organic decline of 1% as well as a minor impact from
Dover witnessed solid growth from its businesses serving the
production and downstream energy markets and the consumer
electronics market, which mitigated the anticipated revenue
decline, driven by a lower North American rig count and reduced
refrigeration activity, mainly associated with a major retailer
as well as soft European industrial markets. Furthermore, Dover's
recent acquisition of Anthony International also contributed to
Cost of sales increased 5% to $1.26 billion in the quarter from
$1.21 billion in the year-ago quarter. Gross profit went up 4%
year over year to $776.6 million. Gross margin remained flat at
38% in the quarter. Operating profit remained flat at $292
million whereas operating margin contracted 60 basis points to
Revenues in the Communication Technologies segment rose 4% to
$372.8 million. The segment's income, however, dropped 5% year
over year to $44.2 million.
Energy revenues increased 6% to $561 million in the quarter. The
segment's operating income increased 6% to $139.5 million.
Revenues in the Engineered Systems segment increased 6% to $867.9
million in the quarter. The segment's income declined 4% to
Printing & Identification segment revenues were $237.9
million in the quarter compared with $243.6 million in the
prior-year quarter. The segment reported an operating income of
$29.7 million, increasing 14% from $26.1 million a year ago.
Bookings and Backlog
The company ended the first quarter with bookings worth $2.214
billion versus $2.078 billion at the end of the first quarter of
2012. Backlog remained flat year over year at $1.64 billion at
end of the reported quarter.
The company generated cash flow from operating activities of
$78.3 million in the reported quarter, down from $161.3 million
in the prior-year quarter. Free cash flow was $31.2 million
compared with $93.1 million in the prior-year quarter. Dover
repurchased 4 million shares in the first quarter.
Outlook for 2013
Dover expects revenues to rise in the range of 7%-9% in 2013.
This assumes organic revenue improvement of 3%-5% and a 4%
contribution from acquisitions. The company expects earnings to
be in the band of $5.05-$5.35 per share for 2013.
Dover will continue to benefit from its active acquisition
pipeline, bookings and backlog growth, growth in the cell phone
market. However, Dover's Energy segment's results are expected to
be affected in the first half of fiscal 2013 due to a lower North
American rig count. Furthermore, Dover has access to the volatile
semiconductor and electronics end-markets through its Printing
and Identification segment. The near-term outlook is bleak for
semiconductor manufacturers. Furthermore, the segment's results
will also be affected given its above average exposure to Europe.
Dover currently retains a short-term Zacks Rank #3 (Hold).
The Babcock & Wilcox Company
EnPro Industries, Inc.
Tri-Tech Holding, Inc.
) with Zacks Rank #1 (Strong Buy), are more favorable options for
investors keen on this industry.
BABCOCK&WILCOX (BWC): Free Stock Analysis
DOVER CORP (DOV): Free Stock Analysis Report
ENPRO INDUS INC (NPO): Free Stock Analysis
TRI-TECH HOLDNG (TRIT): Free Stock Analysis
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