DOWNERS GROVE, Ill., July 25, 2023 /PRNewswire/ — Dover (NYSE: DOV), a diversified global manufacturer, announced its financial results for the second quarter ended June 30, 2023. All comparisons are to the comparable period of the prior fiscal year, unless otherwise noted.
For the quarter ended June 30, 2023, Dover generated revenue of $2.1 billion, a decrease of 3% (-3% organic). GAAP net earnings of $242 million decreased 16%, and GAAP diluted EPS of $1.72 was down 14%. On an adjusted basis, net earnings of $288 million decreased 7% and adjusted diluted EPS of $2.05 was down 4%.
For the six months ended June 30, 2023, Dover generated revenue of $4.2 billion, a decrease of 1% (flat organic). GAAP net earnings of $471 million decreased 9%, and GAAP diluted EPS of $3.35 was down 6%. On an adjusted basis, net earnings of $561 million decreased 4%, and adjusted diluted EPS of $3.99 was down 1%.
A full reconciliation between GAAP and adjusted measures and definitions of non-GAAP and other performance measures are included as an exhibit herein.
MANAGEMENT COMMENTARY:
Dover's President and Chief Executive Officer, Richard J. Tobin, said, "The second quarter results met our expectations. Since the start of the year, we expected 2023 performance to be weighted to the second half due to post-pandemic destocking across the industrial economy and the gradual recovery in several of our end markets.
“In the second quarter, outperformance in our high-growth businesses was offset by transient manufacturing and shipment disruptions in our vehicle services group caused by an ERP system upgrade. This reduced our top line and EPS by approximately $50 million and $0.10, respectively, and is now largely behind us, with output recovering meaningfully in June.
“Order activity in our shorter-cycle end markets remained solid amid normalizing lead times, and our long-cycle and secular-growth-exposed businesses maintained strong shipment levels. As a result, our order backlog continued to normalize but remains elevated.
“We had forecasted softer comparable margins in the first half of 2023 primarily due to business mix and lower volumes in biopharma and EMV payment systems. We prepared for this by proactively intervening on our cost structure starting in the latter half of 2022, and have continued these structural cost reductions in 2023. We expect the roll forward of these actions, demand seasonality and backlog shipment timing to drive sequential and comparable operating margin improvement in the second half.
“Our strong balance sheet position and robust cash flow through the end of the year provide flexibility in our capital allocation initiatives. We are well on track with our organic growth initiatives and capacity build outs in clean energy, CO2 systems, and heat exchangers which are already driving growth in 2023. We remain active and disciplined in pursuing attractive bolt-on acquisitions while opportunistically evaluating capital return strategies.
“We have a constructive outlook for the remainder of the year and see a solid foundation building for 2024. Underlying demand remains good across the portfolio, and a significant volume of business is already in the backlog. Our flexible business model and execution playbook are proven to deliver results in various operating conditions.”
FULL YEAR 2023 GUIDANCE:
In 2023, Dover expects to generate GAAP EPS in the range of $7.68 to $7.83 (adjusted EPS of $8.85 to $9.00), based on full year revenue growth of 2% to 4% (all-in and organic).
CONFERENCE CALL INFORMATION:
Dover will host a webcast and conference call to discuss its second quarter and year-to-date results at 10:00 A.M. Eastern Time (9:00 A.M. Central Time) on Tuesday, July 25, 2023. The webcast can be accessed on the Dover website at dovercorporation.com. The conference call will also be made available for replay on the website. Additional information on Dover's results and its operating segments can be found on the Company's website.
ABOUT DOVER:
Dover is a diversified global manufacturer and solutions provider with annual revenue of over $8 billion. We deliver innovative equipment and components, consumable supplies, aftermarket parts, software and digital solutions, and support services through five operating segments: Engineered Products, Clean Energy & Fueling, Imaging & Identification, Pumps & Process Solutions and Climate & Sustainability Technologies. Dover combines global scale with operational agility to lead the markets we serve. Recognized for our entrepreneurial approach for over 65 years, our team of over 25,000 employees takes an ownership mindset, collaborating with customers to redefine what's possible. Headquartered in Downers Grove, Illinois, Dover trades on the New York Stock Exchange under "DOV."
FORWARD-LOOKING STATEMENTS:
This press release contains "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. All statements in this document other than statements of historical fact are statements that are, or could be deemed, "forward-looking" statements. Forward-looking statements are subject to numerous important risks, uncertainties, assumptions and other factors, some of which are beyond the Company's control. Factors that could cause actual results to differ materially from current expectations include, among other things, general economic conditions and conditions in the particular markets in which we operate, supply chain constraints and labor shortages that could result in production stoppages, inflation in material input costs and freight logistics, the impact of interest rate and currency exchange rate fluctuations, the impacts of COVID-19, or other future pandemics, on the global economy and on our customers, suppliers, employees, business and cash flows, the impact on global or a regional economy due to the outbreak or escalation of hostilities or war, changes in customer demand and capital spending, competitive factors and pricing pressures, our ability to develop and launch new products in a cost-effective manner, our ability to realize synergies from newly acquired businesses, and our ability to derive expected benefits from restructuring, productivity initiatives and other cost reduction actions. For details on the risks and uncertainties that could cause our results to differ materially from the forward-looking statements contained herein, we refer you to the documents we file with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2022, and our Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. These documents are available from the Securities and Exchange Commission, and on our website, dovercorporation.com. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.