Why Did Dover Stock Fall after 1Q16 Earnings Release?



Dover declares 1Q16 earnings on April 21

Dover (DOV), a diversified industrials (XLI) company, released its 1Q16 earnings before the Market opened on April 21, 2016. The stock reacted negatively to the company’s performance and fell 1.6% by the time the Market closed that day. In our pre-earnings series, we highlighted how drastic declines in the US oil and gas (XOP) rig count could drag Dover’s earnings in the upcoming quarter. In this series, we’ll take a look at this in greater detail.

Investors should note that the Market had already factored in much of the decline. The company providing a business update hinting at these factors on March 14, 2016. In the absence of this update, the stock could have suffered a sudden massive drop.

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Initial reactions to earnings by Dover’s peers

Among Dover’s peers in the industrials sector (RGI), Danaher (DHR) also declared its earnings on April 21. DHR reported diluted EPS (earnings per share) of $1.08, which beat consensus estimates by $0.05. DHR has a consistent record of beating earnings estimates and has managed a beat in 36 of the last 43 quarters. The company also raised its full-year profit guidance. As a result, the stock closed 1% higher on its earnings day.

Illinois Tool Works (ITW) released its earnings on April 20. Ingersoll-Rand (IR) is scheduled to release its earnings on April 26. ITW beat its 1Q16 diluted EPS estimates by $0.03 and raised its guidance for fiscal 2016 by $0.05. ITW fell 1.2% when the Market closed on the day of its earnings announcement.


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