Dover (NYSE: DOV), a manufacturer of equipment, components and specialty systems for the use in energy, engineered systems and other sectors, is the latest multinational giant to spook investors with a profit warning.
Last week Honeywell (NYSE: HON) revised its third quarter expectations lower which contributed to a broad sell off among industrial names. The company’s organic growth rate was of concern to investors since the company is among a small handful of multinational behemoth that is used to gauge the general state of the economy.
PPG (NYSE: PPG) added to Honeywell’s concerns when it guided its third quarter earnings per share and revenue outlook below what Wall Street analysts were expecting.
What Dover Said
Dover reported on Monday that it expects to earn $0.81 to $0.83 per share in the third quarter and $3.00 to $3.05 per share for the full year. Wall Street analysts were already estimating the company to earn $1.02 per share in the third quarter and $3.34 for the full year.
Dover previously guided its full year earnings to be in a range of $3.35 to $3.45.
As expected, Dover’s stock lost more than six percent following the announcement as the company’s revised guidance also implies a four to five percent decline in full-year revenue and an organic revenue decline of seven to eight percent.
Dover said in its press release that its downward revised guidance can be attributed to a weaker capital spending across industrial end-markets, continued weakness in the oil and gas exposed markets and continued headwinds in its retail refrigeration business related to production inefficiencies.
Dover’s President and Chief Executive Officer, Robert A. Livingston, said, “While our upstream drilling and production businesses showed solid improvement in the third quarter, and our Printing & Identification businesses continued to perform well, our overall results were well below our expectations. These results were principally impacted by a weak global economy and ongoing production inefficiencies in our retail refrigeration business. Looking forward, we expect continued solid performance from Printing & Identification as well as sequential improvements in our upstream business. We also expect the macro global economy to remain soft, later cycle oil & gas exposed businesses to remain weak, and continued margin pressures in Refrigeration & Food Equipment through the end of the year, as we work to streamline and improve our production systems. These factors will cause our full year results to be below our estimates previously communicated.”