Dover Corporation (DOV), an industrial conglomerate producing a wide range of specialized industrial products and manufacturing equipment, is slated to report third-quarter 2014 results on Oct 16. In the last quarter, it posted a surprise of 0.00%. Let’s see how things are shaping up for this announcement.
Factors Influencing this Quarter
Dover recently stated that it anticipates third-quarter 2014 earnings to be 8 cents below expectations. The company lowered its projection due to associated costs of the recently completed deals and of those in the pipeline, as well as lower Canada/Australia volume in its energy bearings market.
However, the company maintained its fiscal 2014 earnings guidance in the range of $4.75 to $4.85, which represents 11% growth at the mid-point. Going into 2015, the company sees favorable trends with strong US oil & gas dynamics, robust shipments in Printing & Identification, Waste Handling and Fluids as well as benefits from recent acquisitions.
The company ended the second quarter with bookings worth $2.086 billion, which grew 11% versus $1.886 billion at the end of second-quarter 2013. Backlog increased to $1.55 billion at end of the reported quarter from $1.38 billion at the year-ago quarter end.
Moreover, the company will benefit from the Knowles spin-off, which will provide it with the flexibility to focus on growth strategies. In addition, Dover has realigned its businesses into a new segment structure. This will also provide greater opportunities to leverage scale and capitalize on productivity initiatives. Moreover, Dover remains optimistic about the acquisitions in its pipeline which it expects to close in the coming quarters. In line with its expansion strategy, Dover purchased Accelerated Companies for $430 million to bolster its position in the U.S. shale market.
Earnings Whispers?
Our proven model does not conclusively show that Dover is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. This is not the case here, as you will see below.
Zacks ESP: Dover has an earnings ESP of -1.50%. This is because the Most Accurate estimate stands at $1.31 per share while the Zacks Consensus Estimate is higher at $1.33.
Zacks Rank #3 (Hold): Dover has a Zacks Rank #3 (Hold), which when combined with a -1.50% ESP makes surprise prediction difficult.
Stocks that Warrant a Look
Here are some other companies in the industrial products sector you may want to consider as our model shows that these have the right combination of elements to post an earnings surprise this quarter:
Century Aluminum Co. (CENX) has an earnings ESP of +21.57% and sports a Zacks Rank #1 (Strong Buy).
Nordson Corporation (NDSN) has an earnings ESP of +0.88% and a Zacks Rank #2 (Buy).
Caterpillar Inc. (CAT) has an earnings ESP of +2.26% and a Zacks Rank #3.
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