Dover Q2 Earnings Beat on Margin Gains, 2026 Guidance Raised

Revenues rose 7% year over year to $2.19 billion but missed the consensus estimate of $2.21 billion. Organic revenues increased 4.8% in the quarter. Our model expected organic revenues to rise 5.7%.

DOV's Margins Expand on Operating Execution

Cost of sales increased 6.3% year over year to $1.31 billion. Gross profit rose 7.6% to $881 million, while the gross margin improved to 40.2% from 39.9% in the prior-year quarter.

Selling, general and administrative expenses increased 5.4% to $488.8 million. Total adjusted segment EBITDA advanced 10.3% to $567 million, and the related margin expanded 80 basis points to 25.9%.

Dover’s Q2 Segmental Performances

The Engineered Products segment’s revenues increased 2.7% year over year to $283 million in the quarter. The reported figure came in line with our estimate. The segment’s adjusted EBITDA rose 7.8% to $63.2 million from $58.7 million in the year-ago quarter. Demand was strong in aerospace and defense components, fluid dispensing and industrial winches, with stabilization in the North American vehicle aftermarket. The figure met our estimate. 

The Clean Energy & Fueling segment’s revenues climbed 8.9% year over year to $595 million, led by clean energy components and retail fueling. The figure beat our estimate of $591 million. The segment’s adjusted EBITDA increased 17.9% to $137.7 million on volume leverage, operational execution and acquisition integration benefits. The figure beat our estimate of $131.5 million.

The Imaging & Identification segment’s revenues moved up 4.5% year over year to $305 million. The reported figure missed our projection of $307 million. The segment’s adjusted EBITDA was $89.3 million, up 10.1% from the year-ago quarter’s $81.2 million. The figure missed our estimate of $82 million. Growth came from serialization software, core marking and coding equipment, consumables and spare parts.

The Pumps & Process Solutions segment’s revenues rose 6.2% year over year to $552.7 million in the second quarter but missed our estimate of $558 million. The segment’s adjusted EBITDA totaled $192.9 million, up 11.7% from $172.6 million in the prior-year quarter. The reported figure was lower than our projection of $193 million. AI and energy infrastructure, single-use biopharma and industrial pumps supported the top line, while a richer mix of biopharma shipments aided profitability.

The Climate & Sustainability Technologies segment’s revenues grew 9.4% year over year to $455.1 million from $416.2 million. Robust shipments of carbon dioxide refrigeration systems and global heat exchangers drove the gain. We had predicted revenues of $459 million for this segment. The segment’s adjusted EBITDA totaled $83.8 million compared with $84.9 million in the year-earlier quarter, marking a decline of 1.2%. The figure lagged our estimate of $103 million.

DOV's Bookings Signal Strong Demand

Dover’s bookings in the second quarter were worth $2.33 billion, growing 16% from $2.01 billion in the prior-year quarter. Bookings rose across all five segments, strengthening second-half visibility and supporting management's confidence in the outlook. Total bookings were higher than our estimate of $2.26 billion. The book-to-bill ratio came in at 1.06.

Dover's Cash Flow Improves in Q2

Cash flow from operating activities rose to $236 million from $212 million in the year-ago quarter. Capital expenditure declined to $47.8 million from $60.9 million.

The free cash flow increased 24.4% to $188.4 million. It represented 8.6% of revenues and 50.7% of adjusted earnings from continuing operations. For the first six months, the free cash flow totaled $319.6 million, up from $260.7 million.

DOV Raises 2026 Earnings Guidance

Backed by the ongoing improvement in end-market demand, Dover raised its 2026 adjusted earnings guidance to $10.55-$10.75 per share from the previously mentioned $10.45 to $10.65. 

Full-year revenue growth is projected at 6-8%, including organic growth of 4-6%. The company also expects the free cash flow to be 14-16% of revenues and capital expenditure to be $190-$210 million.

Dover Stock’s Price Performance

The company’s shares have gained 16.2% in the past year compared with the industry’s growth of 5.1%.

Image Source: Zacks Investment Research

DOV’s Zacks Rank

Dover currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Dover’s Peer Performance

Graco Inc.’s GGG second-quarter 2026 adjusted earnings of 91 cents per share beat the Zacks Consensus Estimate of 81 cents. The bottom line grew 22% year over year.

Graco’s revenues of $591 million missed the consensus estimate of $609 million. The top line increased 3.3% year over year.

2 Manufacturing Stocks Awaiting Results

Flowserve Corporation FLS is scheduled to release second-quarter 2026 results on June 29. The Zacks Consensus Estimate for FLS’s second-quarter 2026 earnings is pegged at 86 cents per share, suggesting a year-over-year dip of 5.5%

The Zacks Consensus Estimate for Flowserve Corp’s top line is pegged at $1.16 billion, indicating a decrease of 2.4% from the prior year’s actual. FLS has a trailing four-quarter average surprise of 12.7%.

Applied Industrial Technologies, Inc. AIT is scheduled to release fourth-quarter fiscal 2026 results on Aug. 13. The Zacks Consensus Estimate for AIT’s fourth-quarter 2026 earnings is pegged at $2.91 per share, suggesting year-over-year growth of 3.9%.

The Zacks Consensus Estimate for Applied Industrial’s top line is pegged at $1.29 billion, indicating an increase of 5.6% from the prior year’s actual. AIT has a trailing four-quarter average surprise of 4%.

Zacks' Research Chief Names "Stock Most Likely to Double"

Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.

This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research