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Will Dover Corp (DOV) Disappoint This Earnings Season?


Dover Corporation DOV is slated to report third-quarter 2016 results, before the opening bell on Oct 19. Dover reported a year-over-year decrease in both earnings and sales in the second quarter. Let’s see how things are shaping up prior to this announcement.

Earnings Whispers

Our proven model does not conclusively show that Dover is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here as elaborated below:

Zacks ESP: Dover currently has an Earnings ESP of 0.00%. This is because the Most Accurate estimate stands at 82 cents per share, in line with the Zacks Consensus Estimate.

Zacks Rank: Dover carries a Zacks Rank #5 (Strong Sell) which combined with an earnings ESP of 0.00% makes an earnings beat unlikely. The Sell-rated stocks (#4 or 5) should never be considered going into an earnings announcement.

Surprise History

Dover has outpaced the Zacks Consensus Estimate in three of the trailing four quarters, with an average earnings beat of 1.21%.

DOVER CORP Price and EPS Surprise

DOVER CORP Price and EPS Surprise | DOVER CORP Quote

Factors to Consider

Dover’s bookings at the end of the second quarter were worth $1.70 billion, which fell roughly 1.6% from $1.73 billion at the end of second-quarter 2015. Backlog also declined to $1.09 billion at the end of the reported quarter, from $1.16 billion at the year-ago quarter end. This does not augur well for the company’s third-quarter 2016 performance.

Dover projects third-quarter EPS to be in the range of 81–83 cents. Dover attributed weaker capital spending across several industrial end markets, continued weakness in longer cycle oil & gas exposed markets and persistent headwinds in its retail refrigeration business related to production inefficiencies as the reason for the guidance cut.

Additionally, the company expects the macro global economy to remain soft, later cycle oil & gas exposed businesses to remain weak and continued margin pressure in Refrigeration & Food Equipment through the end of the year.

Stocks That Warrant a Look

Here are some stocks worth considering, as according to our model they have the right combination of elements to post an earnings beat this quarter.

Harsco Corp. HSC has an Earnings ESP of +40.00% and a Zacks Rank #1.

Waste Systems Inc. CWST has an Earnings ESP of +90.00% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Alarm.Com Holdings, Inc. ALRM has an Earnings ESP of +10.00% and a Zacks Rank #2.

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