News

Dover Corporation DOV has reported fourth-quarter 2023 adjusted earnings per share (EPS) from continuing operations of $2.45, beating the Zacks Consensus Estimate of $2.44. The bottom line increased 13% year over year, aided by the company’s cost-containment actions.

On a reported basis, Dover has delivered earnings of $2.11 per share in the quarter, up 13% year over year.

Total revenues in the fourth quarter decreased 1.5% year over year to $2.11 billion. The top line missed the Zacks Consensus Estimate of $2.17 billion. Organic growth was a negative 3% in the quarter.

Dover Corporation Price, Consensus and EPS Surprise

Costs and Margins

Cost of sales fell 3.9% year over year to $1.32 billion in the reported quarter. Gross profit was up 2.6% year over year to $786 million. The gross margin was 37.3% compared with the year-ago quarter’s 35.8%.

Selling, general and administrative expenses were up 4.3% to $431 million from the prior-year quarter. Adjusted EBITDA increased 3.3% year over year to $501 million. The adjusted EBITDA margin was 23.8% in the quarter compared with the prior-year quarter’s 22.6%.

Segmental Performances

The Engineered Products segment’s revenues were up 0.8% year over year to $529 million in the quarter. The reported figure fell short of our expectation of $583 million. The segment’s adjusted EBITDA increased 13.1% year over year to $125 million. The figure beat our estimate of $124 million.

The Clean Energy & Fueling segment’s revenues were $449 million compared with the prior-year quarter’s $462 million. The figure missed our estimate of $456 million. The segment’s adjusted EBITDA was $87 million, down from the prior-year quarter’s $98 million. The figure missed our estimate of $97 million.

The Imaging & Identification segment’s revenues moved down 2.6% year over year to $286 million. The reported figure topped our expectation of $279 million. The segment’s adjusted EBITDA was $77 million, down 0.9% from the year-ago quarter. The figure topped our estimate of $75 million.

The Pumps & Process Solutions segment’s revenues rose 6.4% year over year to $445 million in the fourth quarter and topped our estimate of $422 million. The adjusted EBITDA of the segment totaled $134 million, up 2.2% from the year-ago quarter’s $131 million. The reported figure was higher than our projection of $116 million.

The Climate & Sustainability Technologies segment’s revenues fell 9.8% to $398 million from the $442 million reported in the year-earlier quarter. We had predicted revenues of $439 million for this segment. The segment’s adjusted EBITDA totaled $79 million compared with $68 million in fourth-quarter 2022. The figure was higher than our estimate of $69 million.

Bookings

Dover’s bookings at the end of the fourth quarter were worth $1.97 billion compared with the prior-year quarter’s $1.91 billion. Total booking was higher than our estimate of $1.86 billion.

Financial Position

The company generated a free cash flow of $455 million in the fourth quarter of 2023 compared with the year-ago quarter’s $284 million. Cash flow from operations amounted to $516 million in the quarter under review compared with the prior-year quarter’s $339 million.

2023 Performance

Dover has reported an adjusted EPS of $8.80 in 2023 compared with $8.45 in the prior year. Earnings beat the Zacks Consensus Estimate of $8.78. Including one-time items, the bottom line was at $7.52, up 1% from the $7.42 reported in 2022.

Sales were down 0.8% year over year to $8.44 billion from the prior-year figure of $8.51 billion. The top line missed the Zacks Consensus Estimate of $8.51 billion.

Outlook

Dover expects adjusted EPS between $8.95 and $9.15 for 2024. It anticipates year-over-year revenue growth of 2-4%.

Dover’s shares have lost 3% in the past year against the industry’s growth of 16.5%.

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Zacks Rank and Stocks to Consider

DOV currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the Industrial Products sector are AZZ Inc. AZZ, Applied Industrial Technologies AIT and A. O. Smith Corporation AOS. AZZ currently sports a Zacks Rank #1 (Strong Buy), and AIT and AOS carry a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for AZZ’s fiscal 2024 earnings per share is pegged at $4.19. The consensus estimate for 2024 earnings has moved north by 2% in the past 60 days. The company has a trailing four-quarter average earnings surprise of 37.6%. AZZ shares have rallied 51.8% in the past year.

Applied Industrial has an average trailing four-quarter earnings surprise of 13.9%. The Zacks Consensus Estimate for AIT’s 2024 earnings is pinned at $9.43 per share, which indicates year-over-year growth of 7.8%. Estimates have been unchanged in the past 60 days. The company’s shares have gained 26.1% in a year.

The Zacks Consensus Estimate for A. O. Smith’s 2024 earnings is pegged at $4.03 per share. The consensus estimate for 2024 earnings has moved 1% north in the past 60 days and suggests year-over-year growth of 6.8%. The company has a trailing four-quarter average earnings surprise of 14%. AOS shares have gained 16% in the past year.

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