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Dover's (DOV) Robert Livingston on Q1 2016 Results - Earnings Call Transcript

Q1 2016 Earnings Conference Call

April 21, 2016 10:00 AM ET

Executives

Paul Goldberg - VP of IR

Robert Livingston - President and CEO

Brad Cerepak - SVP and CFO

Analysts

Deane Dray - RBC Capital Markets

Joseph Ritchie - Goldman Sachs

Jeffrey Sprague - Vertical Research Partners

Nigel Coe - Morgan Stanley

Julian Mitchell - Credit Suisse

Steven Winoker - Bernstein

Steve Tusa - JP Morgan

Shannon O'Callaghan - UBS

Andy Kaplowitz - Citi Group

Operator

Good morning, and welcome to the First Quarter 2016 Dover Earnings Conference Call. With us today are Bob Livingston, President and Chief Executive Officer; Brad Cerepak, Senior Vice President and CFO; and Paul Goldberg, Vice President of Investor Relations. After the speakers' opening remarks, there will be a question-and-answer period. [Operator Instructions]. As a reminder, ladies and gentlemen, this conference call is being recorded and your participation implies consent to our recording of this call. If you do not agree with these terms, please disconnect at this time. Thank you.

I would now like to turn the call over to Mr. Paul Goldberg. Mr. Goldberg, please go ahead, sir.

Paul Goldberg

Thanks, Kristy. Good morning and welcome to Dover's first quarter earnings call. With me today are Bob Livingston and Brad Cerepak.

Today's call will begin with comments from Bob and Brad on Dover's first quarter operating and financial performance and follow with our outlook for the remainder of 2016. We will then open the call up for questions. As a courtesy, we kindly ask that you limit yourself to one question with a follow-up.

Please note that our current earnings release, Form 10-Q, investor supplement and associated presentation can be found on our website, www.dovercorporation.com. This call will be available for playback through May 5th, and the audio portion of this call will be archived on our website for three months. The replay telephone number is 1-800-585-8367. When accessing the playback, you'll need to supply the following access code, 79357235.

Before we get started, I'd like to remind everyone that our comments today, which are intended to supplement your understanding of Dover may contain certain forward-looking statements that are inherently subject to uncertainties. We caution everyone to be guided in their analysis of Dover by referring to our Forms 10-K and 10-Q for a list of factors that could cause our results to differ from those anticipated in any such forward-looking statement.

Also, we undertake no obligation to publicly update or revise any forward-looking statements, except as required by law. We would also direct your attention to our website where considerably more information on Dover can be found.

And with that, I'd like to turn this call over to Bob.

Robert Livingston

Good morning, everyone, and thank you for joining us for this morning’s conference call. As previously communicated, our first quarter was well below our initial expectations, driven by significant further reductions in activity and capital spending within our U.S. oil and gas related end markets.

These conditions primarily impacted our energy segment and to a lesser extent fluid. The market served by engineered systems and refrigeration and food equipment remained solid, resulting in an organic growth of 3% in each segment. In total, we delivered first quarter adjusted EPS of $0.52 until further steps to reduce our cost and right-size our businesses.

In addition to introducing new products and pursuing share gains, we are increasing the restructuring actions and have stepped up our efforts on productivity, including shared services. Now let me share some comments on the quarter.

From a geographic perspective, excluding our energy segment, our U.S. industrial activity remained solid and grew organically low single-digits year-over-year. Both our China and European markets were down sequentially and also down organically from the prior year.