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Dover Reported Mixed Quarterly Results in 3Q15

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Dover’s price movement

Dover Corporation (DOV) has a market capitalization of $9.6 billion. Dover’s YTD (year-to-date) price movement has fallen in every quarter of 2015 until the recent earnings report.

After the earnings report, Dover rose by 6.6% to close at $61.53 per share as of October 20, 2015, following a 1.6% rise in revenue in 3Q15 and its acquisitions of companies JK Group S.p.A. and Gala Industries. Its price movements on a weekly, monthly, and YTD basis are 2.0%, 2.5%, and -12.7%, respectively.

Technically, Dover has broken all major support in 2015. Currently, it’s trading at 4.0% above its 20-day moving average, 2.1% above its 50-day moving average, and -9.4% below its 200-day moving average.

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The Guggenheim S&P Equal Weight Industrials ETF (RGI) invests 1.3% of its holdings in Dover. The ETF tracks an equal-weighted index of US Industrials stocks drawn from the S&P 500. The YTD price movement of the ETF is -7.8% as of October 19, 2015. The PowerShares S&P 500 High-Quality Portfolio ETF (SPHQ) invests 0.76% of its holdings in Dover.

Dover’s competitors and their market capitalizations are as follows:

  • Emerson Electric (EMR) — $30.3 billion
  • Ingersoll-Rand (IR) — $14.4 billion
  • Weatherford International (WFT) — $7.3 billion
  • IDEX Corporation (IEX) — $5.8 billion

Dover’s performance in 3Q15

Dover reported a net revenue of $1,787.6 million in 3Q15, an increase of 1.6% when compared to a net revenue of $1,758.6 million in 2Q15. Revenues from energy and engineered systems fell by 0.59% and 2.3%, respectively. Revenue from fluids rose by 0.14% and revenue from refrigeration and food equipment rose by 9.9% in 3Q15.

The bookings of energy, engineered systems, and fluids have increased by 1.9%, 0.91%, and 7.0%, respectively. Bookings of refrigeration and food equipment fell by 11.5% in 3Q15. Net income and EPS (earnings per share) fell to $186.1 million and $1.19 per share in 3Q15, falls of 44.0% and 42.5%, respectively, on a quarterly basis.

The company has announced two acquisitions:

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  • Acquisition of Italy-based JK Group S.p.A., a leading manufacturer of innovative inks and consumables serving the fast-growing digital textile printing markets.
  • Acquisition of Gala Industries, a leading manufacturer of underwater pelletizing systems and solutions serving the plastics compounding industry.

The purchase price of JK Group S.p.A and Gala Industries was a combined ~$520 million.

In 3Q15, some of Dover’s key activities were as follows:

  • On August 6, 2015, the company increased its quarterly cash dividend to $0.42 per share, an increase of 5%.
  • On September 7, 2015, the company entered into an agreement with Tokheim Group S.A.S. to acquire Tokheim’s dispenser and system businesses for a price of ~$465 million.

About Dover

Dover Corporation manufactures equipment and components, specialty systems, and support services for four major segments which include energy, engineered systems, fluids, and refrigeration and food equipment.

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