New Orders Keep Flowserve Busy

Since the beginning of July 2009, Flowserve Corporation (FLS - Analyst Report) announced orders worth approximately $88 million. This includes the Westinghouse Electric Co. order, worth more than $45 million, awarded in the third quarter. Flowserve will provide critical safety-related valves, electric motor actuators, and non-safety-related control, ball and plug valves for the Westinghouse AP1000TM nuclear power plants.

The rest of the orders were booked in the previous quarters of 2009. The company received several orders from the solar power industry, which are worth more than $31.5 million. This is an important opportunity for Flowserve as the company considers providing pumping solutions to the alternative energy industry a key element in its global strategic growth plan. This order strengthens the company’s position in the growing renewable energy industry.

Others include an $8 million order for pumps by Shell Malaysia Exploration & Production to aid in the oil recovery efforts for the St. Joseph field in the South China Sea and three orders worth $3 million for energy recovery devices for seawater reverse osmosis desalination projects in Spain.

During the second quarter conference call, the company noted that the quarterly bookings improved 7% sequentially, indicating a possible stabilization in some of its end markets. Starting from the second half of 2008, the company witnessed weakness in orders. Uncertainty in the global markets still remains. However, the second quarter’s sequential improvement indicates some stabilization in the markets.

Though second quarter sales were down 6% year over year, the company showed that they actually increased 4% on a constant currency basis, reflecting the company’s significant backlog and strong after-market performance.

Given its resilient backlog, improved operating platform and successful execution on realignment initiatives, Flowserve raised its full year EPS guidance during the second quarter conference call. The company now expects 2009 EPS in the range of $7.15 to $7.75, compared to the previous guidance of $6.75 to $7.50.

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