Dover Corporation (DOV) reported fourth quarter earnings of 55 cents per share, beating the Zacks Consensus Estimate of 48 cents. However, third quarter EPS was down 39.6% year-over-year.
Quarterly revenue fell 12.7% to $1.5 billion, from $1.7 billion reported last year. The revenue decline was driven by a 19.3% drop in organic revenue, partially offset by a 4.4% contribution from acquisitions and favorable foreign exchange impact of 2.2%. Three of the four business segments reported revenue declines.
Sales in the Industrial Products, Fluid Management and Electronic Technologies segments were down approximately 28%, 19% and 3% respectively, compared to the fourth quarter of 2008. However, the sales declines in each of these segments were lower than that in the previous quarter as the company saw a modest recovery in several of its key end-markets. Sales in the company’s Engineered Systems division increased 6% compared to last year.
For the full-year 2009, Dover reported earnings of $1.99 per share on revenues of $5.8 billion, compared to earnings of $3.67 per share on revenues of $7.6 billion in 2008. The company posted lower revenues in all its four segments for the year. Full-year earnings came in 5 cents above the Zacks Consensus Estimate of $1.94 per share.
The better-than-expected earnings performance during the quarter as well as the full-year was a result of various aggressive actions taken by Dover in response to the market conditions. These actions include synergy capture, pricing initiatives, capacity rationalization and significant workforce reduction.
Dover remains committed to cash generation and debt reduction. During 2009, it generated free cash flow of $682 million and reduced debt by 4225 million. The company’s net debt-to-total capitalization ratio at the end of the year stood at 18.4%, compared to 24.9% at the end of 2008.
In addition, Dover continues to pursue strategic acquisitions in a bid to improve its product offering and complement its organic growth strategy.
The company closed four add-on acquisitions during the fourth quarter. Management stated that these acquisitions will enhance Dover’s position in energy, product identification, refrigeration and food service equipment.
The company is witnessing recovery in most of its key end-markets. Given the improved outlook, Dover expects to post revenue growth of 7%-9% in 2010. The company anticipates organic revenue growth of 4%-6%, with the rest coming from acquisitions. Earnings for 2010 are forecasted in the range of $2.35-$2.65.
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