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Dover Corp. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: October 17, 2012 08:00AM
Dover Corp. (DOV) filed Quarterly Report for the period ended 2012-09-30. Dover Corporation has a market cap of $10.11 billion; its shares were traded at around $57.18 with a P/E ratio of 12.4 and P/S ratio of 1.3. The dividend yield of Dover Corporation stocks is 2.5%. Dover Corporation had an annual average earning growth of 12.4% over the past 10 years. GuruFocus rated Dover Corporation the business predictability rank of 3-star.
Highlight of Business Operations:Revenue for the nine months ended September 30, 2012 increased $482.9 million or 8% from the comparable 2011 period reflecting organic revenue growth of 4%, growth of 6% related to acquisitions and a 2% unfavorable impact from foreign currency translation, driven primarily by the same factors as in the third quarter, coupled with solid results in our refrigeration end market through the first nine months of the year.
The effective tax rates for continuing operations were 27.9% and 27.3% for the three and nine months ended September 30, 2012, respectively, and 25.4% and 22.9% for the comparable periods of 2011. The effective tax rates for the three and nine month periods of 2011 were favorably impacted by net discrete items, principally settlements with U.S. federal and state taxing authorities, totaling $2.4 million and $32.7 million, respectively. Comparatively, settlements during the 2012 three and nine month periods totaled $4.5 million and $5.6 million, respectively. Excluding these discrete items, the effective tax rates were 29.3% and 27.9% for the three and nine months ended September 30, 2012, and 26.2% and 26.8% for the comparable periods of 2011. On a year-over-year basis, the higher rates in the 2012 periods resulted from the unfavorable impact of increased U.S. earnings mix offset by lower effective tax rates in foreign jurisdictions.
Earnings from continuing operations for the third quarter of 2012 increased 8% to $242.2 million, or $1.32 diluted earnings per share (“EPS”), compared to $223.4 million, or $1.19 EPS, in the prior year third quarter. Earnings from continuing operations for the nine months ended September 30, 2012 increased 2% to $651.9 million, or $3.51 EPS, compared to $637.4 million, or $3.37 EPS, in the respective prior year period. The dollar increase in earnings from continuing operations in both the three and nine month periods of 2012 is primarily the result of higher revenues and benefits from productivity and cost containment initiatives, offset in part by higher acquisition-related expenses and increased restructuring charges relative to the 2011 periods. The EPS increases for the three and nine month periods of 2012 reflect the increase in earnings, as well as impact of lower weighted average shares outstanding for the 2012 periods relative to the same periods of 2011. As discussed in the "Financial Condition" section, we have repurchased incrementally more common shares in the 2012 periods.
Our Energy segment again posted solid revenue, earnings and bookings in the third quarter of 2012. Revenue and earnings increased 10% and 11%, respectively, in the third quarter of 2012 due to relative strength in the production and downstream energy markets served by the segment, which more than offset softness in the drilling market. Organic revenue increased 3%, acquisitions made in 2011 and 2012 generated revenue growth of 8%, and foreign currency translation had a 1% unfavorable impact during the quarter.
Revenue generated by our Energy segment for the nine months ended September 30, 2012 increased by $242.3 million, or 17%, due to relative strength in the drilling, production and downstream energy markets served by the segment. Organic revenue increased 13%, acquisitions made in 2011 and 2012 generated revenue growth of 5%, and foreign currency translation had a 1% unfavorable impact during the period. The revenue trends for the nine month period were relatively consistent in each of our end markets to those outlined for the quarter; however, year-over-year drilling revenue grew at a slower rate due to the slower rate of growth in the U.S. rig count and lower natural gas prices.
Stocks Discussed: DOV,