10-QPeriod: Q1 FY2010

DOVER Corp Quarterly Report for Q1 Ended Mar 31, 2010

Filed April 23, 2010For Securities:DOV

Summary

Dover Corporation (DOV) reported strong first-quarter 2010 results, demonstrating significant year-over-year improvement. Revenue surged by 14.8% to $1.58 billion, driven by a combination of organic growth, acquisitions, and favorable foreign exchange. This top-line expansion, coupled with effective cost management and lower restructuring charges, led to a substantial 99% increase in earnings from continuing operations, reaching $121.5 million, or $0.65 per diluted share. The company also saw a notable improvement in its gross profit margin to 38.7% from 35.0% in the prior year quarter. The company's financial health remains robust, with substantial cash flow generation. While cash and cash equivalents saw a slight decrease, short-term investments increased significantly, leading to a robust total liquidity position. Management anticipates continued revenue and earnings growth throughout 2010, projecting a 10-13% increase in revenue and diluted EPS in the range of $2.70 to $2.95. The report highlights the company's strategic focus on organic growth, integration of acquisitions, and operational efficiency as key drivers for future performance.

Financial Highlights

42 data points
Beta

Revenue

$1.48B

39.9% Gross Margin

Net Income

$108.13M

7.3% Net Margin

EPS (Diluted)

$0.58

Total Assets

$8.03B

Cash & Equivalents

$690.29M

Free Cash Flow

$47.73M

Financial Statements
Beta
Revenue$1.48B
Cost of Revenue$971.11M
Gross Profit$590.45M
SG&A Expenses$409.17M
Operating Income$202.99M
Interest Expense$28.85M
Net Income$108.13M
EPS (Basic)$0.58
EPS (Diluted)$0.58
Shares Outstanding (Basic)187.09M
Shares Outstanding (Diluted)187.89M

Key Highlights

  • 1Revenue increased by 14.8% to $1.58 billion in Q1 2010 compared to Q1 2009.
  • 2Earnings from continuing operations surged by 99% to $121.5 million, with diluted EPS rising to $0.65 from $0.33.
  • 3Gross profit margin improved significantly to 38.7% from 35.0% year-over-year.
  • 4The company generated $87.1 million in cash flow from operating activities for continuing operations.
  • 5Dover provided an optimistic 2010 outlook, forecasting revenue growth of 10-13% and diluted EPS between $2.70 and $2.95.
  • 6Short-term investments saw a substantial increase of $97.9 million.
  • 7Losses from discontinued operations decreased to $13.4 million from $7.7 million in the prior year period.

Frequently Asked Questions

Dover's revenue growth of 14.8% in Q1 2010 was driven by a combination of organic revenue growth of 7.0%, 5.1% from acquisitions completed in 2009, and a 2.7% favorable impact from foreign exchange.

Profitability significantly improved due to a higher gross profit margin (38.7% vs. 35.0%), driven by increased sales volumes and reduced restructuring charges. Selling and administrative expenses as a percentage of revenue also decreased.

Dover anticipates 2010 revenue to increase by 10% to 13% over 2009 levels, with diluted earnings per share projected to be in the range of $2.70 to $2.95.

While cash and cash equivalents decreased slightly, short-term investments increased by $97.9 million. The total liquidity position, including cash, cash equivalents, and short-term investments, stood at $1.012 billion at the end of Q1 2010.