Dover Corporation (DOV) shares took a hit on Thursday, trading lower after the company announced its third-quarter earnings results. The company reported revenue of $1.984 billion, a modest 1% increase year-over-year, but falling short of the anticipated $2.045 billion consensus. While the company did see growth in segment earnings margin, expanding to 22.6% from 21.9% a year ago, the revenue miss weighed heavily on investor sentiment.
Despite the revenue shortfall, Dover highlighted positive aspects. Total adjusted segment EBITDA margin improved to 24.4% from 23.7% in the previous year, demonstrating operational efficiency. Bookings also showed a strong performance, rising 5.6% year-over-year to $1.853 billion in the quarter. Adjusted earnings per share (EPS) came in at $2.27, a 6% increase compared to the prior year, but slightly below the anticipated $2.29 consensus.
However, the most significant impact on the stock price came from Dover’s revised guidance for 2024. The company lowered its adjusted EPS forecast from a range of $9.05 to $9.20 to a new range of $8.08 to $8.18, significantly below the consensus of $8.84. Dover also scaled back its revenue growth outlook from 3% to 4% to a new range of 1% to 3%. These adjustments primarily stem from the company’s decision to reclassify its Environmental Solutions Group business unit as discontinued operations, which had previously been factored into the initial outlook.
Despite the lowered guidance, Dover’s President and Chief Executive Officer, Richard J. Tobin, struck an optimistic tone. He emphasized the company’s broad-based performance across the majority of its portfolio, highlighting that it offset near-term headwinds in polymer processing, beverage can-making, and heat exchangers for European heat pumps. Tobin also emphasized the strong bookings performance, particularly in markets with secular growth potential.
Looking ahead, Tobin expressed confidence in the company’s future prospects. He stated, “We have a constructive outlook for the remainder of 2024 and for next year. Underlying end market demand is very healthy across the portfolio driven by our secular growth platforms, coupled with the bottoming of our long-cycle-exposed end markets in 2024.”
For investors interested in gaining exposure to Dover Corporation, options include ETFs such as ProShares S&P Kensho Smart Factories ETF (MAKX) and iShares Trust iShares U.S. Manufacturing ETF (MADE).
As of Thursday’s closing, DOV shares were down 1.96% at $187.93.