Dover Q3 Profit Decreases, Lowers Full Year Guidance; Announces Two Acquisitions

(RTTNews) - Dover (DOV) reported that its overall performance in the third quarter was in line with the company's expectations. The company lowered full year guidance to reflect the impact of generally weaker global market conditions.

Dover also announced it has signed definitive agreements to acquire two businesses, both of which are expected to close later in the fourth quarter. The company has agreed to acquire Italy-based JK Group SPA , a leading manufacturer of innovative inks and consumables serving the fast-growing digital textile printing markets. The company has also agreed to acquire Gala Industries, Inc., a leading manufacturer of underwater pelletizing systems and solutions serving the plastics compounding industry, headquartered in Eagle Rock, Virginia.

The combined purchase price of JK and Gala will be approximately $520 million. JK and Gala are expected to have combined 2016 revenue of about $165 million and be about $0.11 accretive to continuing earnings per share in 2016. On an operating basis, which excludes purchase accounting amortization, JK and Gala are expected to be approximately $0.23 accretive in 2016.

Combining JK and Gala with the previously announced Tokheim deal, Dover expects 2016 acquisition revenue to be approximately $500 million and 2016 continuing earnings per share accretion to be about $0.18. On an operating basis, which excludes normal transaction-related costs and purchase accounting amortization, these acquisitions are expected to be approximately $0.38 accretive in 2016.

Dover now expects full-year revenue to decline 10% to 11%, a two point reduction from its previous forecast. Full year EPS is expected to be in the range of $3.73 to $3.80, as compared to prior forecast of $3.75 to $3.90.

For the third quarter of 2015, adjusted EPS from continuing operations was $1.14, On average, 16 analysts polled by Thomson Reuters expected the company to report profit per share of $1.07 for the quarter. Analysts' estimates typically exclude special items.

Earnings from continuing operations were $186.5 million, a decrease of 17% as compared to $225.7 million for the prior year period. Earnings per share from continuing operations were $1.19, compared to $1.34 in the prior year period,

Revenue was $1.79 billion, a decrease of 11% from the prior year. The company said the decrease in revenue was driven by an organic revenue decline of 10% and an unfavorable impact from foreign exchange of 4%, partially offset by 3% growth from acquisitions. Analysts expected revenue of $1.81 billion for the quarter.