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Dover (DOV) to Report Q2 Earnings: What's in the Offing?

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Dover Corporation (DOV - Free Report) is set to release second-quarter 2019 results, before the opening bell on Jul 18.

The company is poised to gain from improved performance in the Engineered Systems and Fluids segments, strong backlog, cost-reduction initiatives, as well as restructuring programs. However, softer demand conditions in retail refrigeration remain a headwind.

Let’s see how things are shaping up prior to this announcement.

Factors at Play

Dover’s second-quarter 2019 results are likely to improve on solid order backlog. Impressive performance of the Engineered Systems and Fluids segments, along with stellar organic growth, benefits from cost-containment actions, as well as footprint optimization projects and retail refrigeration will negate the impact of weak demand in the Refrigeration & Food Equipment segment.

The Zacks Consensus Estimate for Dover’s to-be-reported quarter’s earnings is currently pinned at $1.55, reflecting year-over-year growth of 19.2%. The Zacks Consensus Estimate for total sales of $1,861 million for the quarter indicates an improvement of 3.5% from the prior-year quarter.

Coming to the segments, the Zacks Consensus Estimate for Dover’s Fluids segment net sales is pegged at $726 million for the quarter, representing an expected year-over-year increase of 4.6%.

The Zacks Consensus Estimate for the Engineered Systems segment’s revenues is currently pinned at $720 million, a projected increase of 2.4% from the prior-year quarter’s $703 million.

Moreover, the Zacks Consensus Estimate for the Refrigeration and Food Equipment segment’s net sales is $399 million for the quarter under review, estimated to be marginally down from the year-ago quarter’s $401 million. The company expects the segment’s revenues to be affected by lower volumes in the Belvac business and softness in the retail refrigeration market.

Dover anticipates to benefit from its targeted cost-reduction initiatives throughout 2019. The company has executed restructuring programs to better align costs and operations with the current market conditions through targeted facility consolidations, headcount reduction and other measures. 

Dover Corporation Price and EPS Surprise

Earnings Whispers

Our proven model does not conclusively show that Dover is likely to beat on earnings in this quarter as it lacks the key components. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or at least 3 (Hold) for this to happen. This is not the case here as you will see below:

Zacks ESP: The Earnings ESP for Dover is 0.00%. This is because the Most Accurate Estimate and the Zacks Consensus Estimate are both pegged at $1.55, currently. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Dover currently carries a Zacks Rank of 3, which increases the predictive power of ESP. But we also need to have a positive earnings ESP to be sure of an earnings beat.

It should be noted that we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are a few Industrial Products stocks which you may consider as our model shows that they have the right combination of elements to post an earnings beat in their upcoming releases:

Roper Technologies, Inc. (ROP - Free Report) has an Earnings ESP of +0.49% and sports a Zacks Rank of 1, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Terex Corporation (TEX - Free Report) has an Earnings ESP of +1.58% and carries a Zacks Rank #3, currently.

AptarGroup, Inc. (ATR - Free Report) , another Zacks #3 Ranked stock, has an Earnings ESP of +0.56%.

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