10-QPeriod: Q3 FY2008

DOVER Corp Quarterly Report for Q3 Ended Sep 30, 2008

Filed October 22, 2008For Securities:DOV

Summary

Dover Corporation's (DOV) 10-Q filing for the period ending September 30, 2008, indicates a company navigating a complex economic environment with resilience. Revenue for the third quarter of 2008 saw a 5% increase year-over-year to $1.97 billion, driven by the Fluid Management and Industrial Products segments, with overall organic growth of 3%. Net earnings from continuing operations grew by 5% to $190.3 million, translating to diluted earnings per share of $1.01, a modest increase from $0.90 in the prior year period, partly due to share repurchases. The company's financial position remains strong, with a substantial free cash flow generation of $606.7 million for the nine-month period, up significantly from $427.5 million in the prior year. Despite an increase in total debt to fund acquisitions and share repurchases, the net debt to total capitalization ratio remained stable at 27.4%. However, the report also highlights a $55.1 million loss from discontinued operations, largely due to a significant write-down of the Triton business, indicating ongoing strategic restructuring. Investors should note the slight increase in selling and administrative expenses as a percentage of revenue and the ongoing impact of economic uncertainties, as articulated in the forward-looking statements.

Financial Highlights

29 data points
Beta

Revenue

$1.97B

35.8% Gross Margin

Net Income

$187.65M

9.5% Net Margin

EPS (Diluted)

$1.00

Cash & Equivalents

$575.93M

Free Cash Flow

$305.88M

Financial Statements
Beta
Revenue$1.97B
Cost of Revenue$1.26B
Gross Profit$704.34M
SG&A Expenses$434.99M
Operating Income$269.35M
Net Income$187.65M
EPS (Basic)$1.01
EPS (Diluted)$1.00
Shares Outstanding (Basic)186.49M
Shares Outstanding (Diluted)187.71M

Key Highlights

  • 1Revenue increased by 5% to $1.97 billion for Q3 2008 compared to Q3 2007, with organic growth of 3%.
  • 2Net earnings from continuing operations rose by 5% to $190.3 million, and diluted EPS from continuing operations was $1.01, up from $0.90.
  • 3Free cash flow for the nine months ended September 30, 2008, significantly increased by $179.2 million to $606.7 million.
  • 4The company repurchased approximately 2.38 million shares of common stock in Q3 2008 as part of its $500 million repurchase program.
  • 5Long-term debt increased due to new note issuances ($350 million 5.45% in 2018 and $250 million 6.60% in 2038), used to repay commercial paper.
  • 6A substantial loss of $55.1 million from discontinued operations was reported for the nine months, primarily due to a $51.1 million write-down of the Triton business.
  • 7Selling and administrative expenses as a percentage of revenue increased to 22.1% in Q3 2008 from 21.2% in Q3 2007.

Frequently Asked Questions

Dover Corporation reported a 5% increase in revenue to $1.97 billion for the third quarter of 2008 compared to the same period in 2007. Net earnings from continuing operations grew by 5% to $190.3 million, resulting in diluted earnings per share of $1.01. The company also generated strong free cash flow of $606.7 million for the first nine months of the year.

The company reported a loss from discontinued operations of $2.7 million for the third quarter and $55.1 million for the nine months ended September 30, 2008. The significant nine-month loss was primarily due to a $51.1 million write-down of the Triton business within the Engineered Systems segment.

Dover issued new long-term debt totaling $600 million in March 2008 to repay commercial paper. Total debt increased, but with higher cash and short-term investments, the net debt to total capitalization ratio remained stable at 27.4%. Cash and cash equivalents decreased slightly to $575.9 million from $606.1 million at the end of 2007.

Revenue growth was primarily driven by the Fluid Management and Industrial Products segments. The Fluid Management segment saw strong performance in energy and fluid solutions markets, while Industrial Products benefited from strength in military and solid waste management and strategic acquisitions, though some areas like construction and automotive service experienced weakness.