01—Abstract
Summary
Summary of the 10-K filed February 10, 2017. Cited figures are marked; the original filing is the authoritative source.
Dover Corporation's 2016 10-K filing details a year of mixed performance, with revenue declining slightly by 2.3% to $6.8 billiona, impacted by a significant downturn in the Energy segment (-25.3% revenue decline) due to lower oil prices and reduced customer capital spending.
This was partially offset by growth in the Engineered Systems (+1.0%) and Fluids (+21.5%) segments, with the latter driven by acquisitions. The company made substantial strategic acquisitions in 2016, totaling $1.6 billionb, notably in the Fluids and Engineered Systems segments, to bolster its growth initiatives and product portfolios. Despite the revenue dip, Dover maintained a strong focus on operational efficiency and shareholder returns, increasing its annual dividend for the 61st consecutive year.
The company also continued its portfolio reshaping through strategic dispositions. Looking ahead to 2017, Dover projected robust revenue growth of 10-12%, driven by anticipated acquisition contributions and a projected recovery in the Energy segment, supported by an assumed average oil price of $55c per barrel and a U.S. rig count between 680-700.
02—Key points
Key Highlights
- Dover reported 2016 revenue of $6.8 billion, a 2.3% decrease from 2015, primarily due to a 25.3% revenue decline in the Energy segment caused by volatile oil prices and reduced customer spending.
- Significant strategic acquisitions totaling $1.6 billion were completed in 2016, focusing on expanding capabilities within the Fluids and Engineered Systems segments.
- The company continued its commitment to shareholder returns by increasing its annual dividend for the 61st consecutive year, demonstrating a focus on consistent shareholder value.
- Dover experienced a 14.6% decrease in earnings from continuing operations to $508.9 million ($3.25 EPS), impacted by lower revenues, a product recall charge, and acquisition-related expenses.
- The company expects 2017 revenue growth of 10-12%, driven by acquisitions and an anticipated rebound in the Energy segment, supported by higher oil price assumptions.
- Restructuring charges of $40.2 million were incurred in 2016, primarily within the Energy and Fluids segments, aimed at aligning costs with market conditions.
- Dover's international revenue represented 42% of total revenue in 2016, highlighting the company's significant global presence and reliance on international markets.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2016, Dover Corp kept $0.08.
- Revenue$6.04B100.0%
- Cost of revenue−$3.82B63.1%
- Gross profit$2.23B36.9%
- Operating costs−$1.52B25.1%
- Operating income$709.0M11.7%
- Interest, other & tax−$200.1M3.3%
- Net income$508.9M8.4%
04—Financials
Financial Highlights
Figures from 10-KFY2016filed February 10, 2017Financial Statements
FY2016 against FY2015
| Line item | FY2016FY2015 | Change |
|---|---|---|
| Revenue | $6.04B$6.96B | −13.1% |
| Cost of Revenue | $3.82B$4.39B | −13.0% |
| Gross Profit | $2.23B$2.57B | −13.3% |
| R&D Expenses | $115.84M$115.04M | +0.7% |
| SG&A Expenses | $1.52B$1.65B | −7.8% |
| Operating Income | $708.97M$920.76M | −23.0% |
| Interest Expense | $135.97M$131.68M | +3.3% |
| Net Income | $508.89M$869.83M | −41.5% |
| EPS (Basic) | $3.28$5.52 | −40.6% |
| EPS (Diluted) | $3.25$5.46 | −40.5% |
| Shares Outstanding (Basic) | 155.23M157.62M | −1.5% |
| Shares Outstanding (Diluted) | 156.64M159.17M | −1.6% |
05—Questions
Frequently Asked Questions
What was Dover's overall financial performance in 2016?
In 2016, Dover's revenue decreased by 2.3% to $6.8 billion compared to 2015. This was largely due to a significant decline in the Energy segment, impacted by lower oil prices and reduced customer capital spending. Earnings from continuing operations also saw a decrease.
What were the key strategic initiatives undertaken by Dover in 2016?
Dover made significant strategic moves in 2016, completing six acquisitions totaling $1.6 billion, primarily within the Fluids and Engineered Systems segments, to strengthen its market position and drive future growth. The company also continued to streamline its operations through dispositions and restructuring activities.
How did the different business segments perform in 2016?
The Energy segment experienced a substantial revenue decline of 25.3% due to market conditions. The Engineered Systems segment saw a slight revenue increase of 1.0%, driven by its Printing & Identification platform. The Fluids segment grew significantly by 21.5%, largely due to acquisitions, while the Refrigeration & Food Equipment segment's revenue decreased by 6.4%, partly due to dispositions.
What is Dover's outlook for 2017?
Dover projected a strong rebound in 2017, with total consolidated revenue growth expected to be between 10% and 12%. This growth is anticipated to be driven by contributions from recent acquisitions and an expected recovery in the Energy segment, supported by an assumed average oil price of $55 per barrel.
06—Continue