Summary
Dover Corporation's (DOV) Q2 2018 10-Q filing shows a 3.5% increase in consolidated revenue for the quarter, reaching $1.8 billion, driven by organic growth across its Engineered Systems and Fluids segments, offset by dispositions and a decline in Refrigeration & Food Equipment. Net earnings for the quarter decreased by 14.7% to $140 million, or $0.91 per diluted share, largely due to the significant gain on the sale of businesses in the prior year period. Earnings from continuing operations, however, saw a notable increase of 16.8% to $166.5 million, or $1.08 per diluted share, benefiting from lower U.S. tax rates, reduced corporate and interest expenses, and the positive impact of rightsizing initiatives. The company completed the strategic spin-off of Apergy Corporation in May 2018, with Apergy's historical results now reported as discontinued operations. This separation resulted in a significant cash inflow of $700 million from Apergy, which was largely used to fund a $700 million accelerated share repurchase program. Despite a decrease in cash and cash equivalents from the prior year, primarily due to this share repurchase activity and dividend payments, Dover maintains a strong financial position with access to a $1.0 billion revolving credit facility.
Financial Highlights
48 data points| Revenue | $1.80B |
| Cost of Revenue | $1.13B |
| Gross Profit | $665.24M |
| SG&A Expenses | $428.77M |
| Operating Income | $236.46M |
| Interest Expense | $32.13M |
| Net Income | $139.96M |
| EPS (Basic) | $0.92 |
| EPS (Diluted) | $0.91 |
| Shares Outstanding (Basic) | 151.74M |
| Shares Outstanding (Diluted) | 153.94M |
Key Highlights
- 1Consolidated revenue grew 3.5% to $1.8 billion for Q2 2018, with organic growth of 3.5%.
- 2Net earnings decreased 14.7% to $140 million due to prior year gains on asset sales, but earnings from continuing operations increased 16.8% to $166.5 million.
- 3The spin-off of Apergy Corporation was completed in May 2018, with Apergy's results now classified as discontinued operations.
- 4An accelerated share repurchase program of $700 million was initiated, funded by proceeds from the Apergy spin-off.
- 5The company's effective tax rate decreased significantly to 21.3% in Q2 2018 from 28.1% in Q2 2017, primarily due to U.S. tax law changes.
- 6The Refrigeration & Food Equipment segment experienced a revenue decline of 5.8% due to continued weakness in retail refrigeration markets.
- 7Restructuring charges increased, primarily related to rightsizing programs to align cost structures post-Apergy separation.