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Dover's 1Q Profit Down As End-markets Shrink

The Associated Press

NEW YORK (AP) — Dover Corp. said Wednesday its first-quarter profit fell nearly two-thirds as the diversified manufacturer continued to feel the grip of the recession on its markets, particularly electronic assembly and infrastructure.

The New York-based company, which makes refrigeration products, pumps and all-wheel drive powertrain systems, said that due to deteriorating markets it expects 2009 profit to be below Wall Street expectations.

Net income for the period ended March 31 fell to $53.4 million, or 29 cents per share, from $147.2 million, or 76 cents per share, a year earlier.

The results included unspecified pre-tax restructuring charges of $35.2 million, or 12 cents per share, and a loss from discontinued operations of $7.7 million, or 4 cents per share. Excluding items, it earned 33 cents per share.

Analysts surveyed by Thomson Reuters, who typically exclude one-time items from their estimates, expected earnings of 47 cents per share.

Revenue declined 26 percent, to $1.4 billion, falling short of Wall Street's expectations, amid a sharper than expected drop in orders. Weaker margins and a stronger dollar also hurt results. Analysts were looking for $1.53 billion in revenue.

However, Dover, which also makes products for the oil and gas industry, reported more than 10 percent operating margins with free cash flow of $83 million, or 6 percent of revenue, consistent with last year.

Robert A. Livingston, president and CEO, said Dover increased restructuring during the quarter as the decline in order rates "was more severe than originally anticipated."

The company said although order trends improved sequentially during the quarter, it doesn't expect a meaningful recovery in its end-markets for the balance of 2009.

Dover said it expects 2009 earnings to be between $2 and $2.30 per share. That estimate includes more pre-tax restructuring charges of about $35 million, most of which will be taken in the second quarter.

Analysts surveyed by Thomson Reuters expect earnings this year to be $2.51 per share.

Dover's shares have lost about 41.7 percent of their value since reaching a 52-week high of $54.57 on May 14. Its shares rose 51 cents, to $32.30 in midday trading Wednesday.