Dover Reports Third Quarter 2002 Results
Dover Corporation (NYSE: DOV) earned $57.3 million or $.28 diluted earnings per share (DEPS) from continuing operations in the third quarter ended September 30, 2002, compared to $5.7 million or $.03 per diluted share from continuing operations in the comparable period last year. Sales in the third quarter of 2002 were $1.1 billion, basically unchanged when compared to the prior year.
The operating earnings results (net of tax) included restructuring, inventory and other charges of $3.8 million ($.02 DEPS) in 2002 and $32.0 million ($.16 DEPS) in 2001. Net earnings for the third quarter of 2002, which included results of discontinued operations, were $56.4 million or $.28 per diluted share compared to $2.6 million or $.01 per diluted share in the third quarter of last year.
Net earnings from continuing operations for the first nine months of 2002 were $168.1 million or $.83 per diluted share compared to $132.3 million or $.65 per diluted share from continuing operations in the comparable period last year. For the first nine months of 2002, net earnings before changes in accounting principles were $156.8 million or $.77 per diluted share, including $11.4 million or $.06 per diluted share in losses from discontinued operations, compared to $225.0 million or $1.10 per share in 2001, which included $92.7 million or $.45 per share in earnings from discontinued operations. The nine months' earnings results (net of tax), included restructuring, inventory and other charges of $8.2 million ($.04 DEPS) in 2002 and $43.9 million ($.21 DEPS) in 2001. Year-to-date sales for 2002 were $3.2 billion compared to $3.4 billion last year, a decrease of 6%.
For the first nine months of 2002, net earnings were a loss of $136.3 million or $.67 per diluted share compared to earnings of $225.0 or $1.10 per diluted share in 2001. The current year's results include the impact of the adoption of Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets. The adoption resulted in a goodwill impairment charge of $345.1 million ($293.0 million net of tax or $1.44 DEPS) for Dover, which was recognized as a change in accounting principle in the first quarter of 2002. The adoption of the Statement also discontinues the amortization of goodwill, effective January 1, 2002. Goodwill amortization totaled $11.1 million net of tax or $.05 per diluted share in the third quarter of 2001 and $31.7 million net of tax or $.15 per diluted share for the first nine months of 2001.
Segment earnings for the quarter were $100.6 million, an increase of 223% or $69.4 million from $31.2 million last year. In the Dover Industries segment, earnings increased 4% to $34.0 million from the comparable quarter last year on a sales decline of 1%. Dover Diversified's earnings increased 63% to $36.3 million on a 1% sales increase. In Dover Resources, quarterly earnings were $30.5 million, a 17% increase over last year on a sales decrease of 6%.
The Dover Technologies segment recorded a slight loss of $0.2 million in the third quarter compared to a loss of $49.8 million last year. Sales of $276.4 million were up 4% from last year's third quarter results.
Commenting on the results and the current outlook, Thomas L. Reece, Chairman and CEO, said, "Our performance in the third quarter represents a significant improvement over last year's results, which reflected substantial inventory reserves and other charges we took to address the difficult market conditions we were facing. Since that time, all of our businesses have continued to make good progress in cost reduction and operating efficiency, and the positive results of their efforts can be seen in the improved operating leverage at many of our companies, even where sales have declined compared to prior year periods. In the long run, these efforts will yield additional dividends once a sustained economic recovery takes hold.
For now, however, the current economic climate remains challenging, particularly in the markets served by our CBAT and SEC companies. In fact, these companies will be taking additional steps to further reduce their cost structure to help ensure that they can deliver consistent profits while responding to the changing needs of their electronics and telecommunications customers. There are likely to be charges in the fourth quarter for the additional restructurings. As we have done throughout the current downturn, we continue to encourage and support new product development across our organization so that we will be well-positioned to take full advantage of the opportunities created by a sustained recovery. Enhancing our geographic diversity is also a long-term priority, and a number of our companies, particularly in the Technologies segment, are committed to substantially increasing their presence and activities in Asia to better serve those growing markets."
Source: Dover Corporation