By Ernest Scheyder
July 18 Dover Corp, which makes garbage
truck compactors, car washes, drill bits for oil rigs and scores
of other industrial products, boosted its 2013 forecast on
Thursday, citing a gain from a U.S. tax audit and improving
sales across units.
The conglomerate said it received a "favorable resolution to
a domestic tax audit" and paid an effective second-quarter tax
rate of 7.3 percent, aiding second-quarter profit by 36 cents
per share. The news sent Dover's shares up more than 4 percent.
Dover now expects to earn $5.56 to $5.71 per share this
year, up from a previously forecast $5.05 to $5.35. The company
received another small tax gain in the first quarter and will
spend money as it prepares to spin off its Knowles
communications unit early next year.
The new estimate well exceeds the average analyst estimate
of $5.24 per share.
Growth later this year will not just come from the tax gain,
Chief Executive Bob Livingston said on a conference call with
"Third and fourth quarter, we do expect some significant
growth, sequentially, second half over the first half,"
Livingston said. "The driver of this growth is going to be new
Through its myriad brand names, including Norris, Anthony
and DEK, Dover has dominated many of its markets in North
America. Livingston and other executives are now trying to
recreate that success in Asia, Latin America, the Middle East
and other emerging markets.
So far the strategy is paying off: all four of Dover's
reporting units saw double-digit jumps in second-quarter sales
in China, the company said.
"We still see plenty of opportunities for this business in
emerging economies," Livingston said.
Offering customers many products and services as possible in
each area will be key, a practice Dover executives say they are
keen to continually refine. For instance: Dover hopes oil giants
will turn to it for not only diamond-tip drill bits, but
servicing on rigs and replacement parts, a lucrative business
For the second quarter, Dover posted a better-than-expected
profit, helped largely by a gain in sales of refrigeration
display cases in emerging markets. Wal-Mart's grocery
division, for instance, is Dover's top customer in Brazil.
Second-quarter net earnings rose to $330 million, or $1.91
per share, from $214.1 million, or $1.15 per share, in the
Excluding the tax gain and other one-time items, the company
earned $1.36 per share.
By that measure, analysts expected earnings of $1.29 per
share, according to Thomson Reuters I/B/E/S.
Revenue was up 9 percent to $2.23 billion. Analysts expected
revenue of $2.19 billion.
Shares of Illinois-based Dover rose 4.1 percent to $83.68 in
Thursday afternoon trading. The stock has gained 27 percent so
far this year.