Flowserve Corporation’s (FLS - Free Report) first-quarter 2024 adjusted earnings (excluding 2 cents from non-recurring items) of 58 cents per share beat the Zacks Consensus Estimate of 47 cents. The bottom line increased 45% year over year. Results primarily benefited from higher revenues, partially offset by an increase in operating costs and expenses.
Flowserve’s total sales of $1.09 billion beat the consensus estimate of $1.04 billion. The top line increased 10.9% year over year. Sales increased 10.6% on a constant-currency basis.
Aftermarket sales in the reported quarter increased 8.1% year over year (up 8.1% on a constant-currency basis) to $558.9 million. Original equipment sales totaled $528.6 million, reflecting an increase of 14.1% year over year (up 13.5% on a constant-currency basis).
Total bookings amounted to $1.04 billion in the quarter, reflecting a decrease of 1.8% (down 1.8% on a constant-currency basis) year over year. The backlog at the end of the reported quarter was $2.6 billion, down 6.9% year over year.
Segmental Details
FLS currently has two reportable segments, Flowserve Pump Division and Flow Control Division. A brief discussion of the segments is provided below:
Revenues from the Flowserve Pump Division segment were $769.4 million, up 9.9% year over year. Our estimate was $734.5 million. Bookings decreased 3.4% year over year to $703.5 million. Segmental operating income was $110.9 million, up 40.2% year over year.
Revenues from the Flow Control Division segment were $320.5 million, up 13.8% year over year. Our estimate was $302.2 million. Bookings of $341.1 million increased 2.7% on a year over year basis. The segment’s operating income was $34.7 million, up 87.6% year over year. Our estimate for the same was $32 million.
Margin Profile
In the first quarter, Flowserve’s cost of sales increased 9.5% year over year to $748.5 million. Gross profit increased 14.2% year over year to $339 million and the margin increased 90 basis points (bps) to 31.2%. Selling, general and administrative expenses were $228.4 million, down 6.5% year over year.
Operating income in the quarter increased 97.7% year over year to $113.1 million. The adjusted operating margin came in at 10.9%, up 260 bps year over year. The effective tax rate was 20.4% in the quarter.
Balance Sheet and Cash Flow
Exiting the first quarter, Flowserve had cash and cash equivalents of $532 million compared with $545.7 million at the end of December 2023. Long-term debt (due after one year) was $1.15 billion compared with $1.17 billion at the end of December 2023.
In first three months of 2024, the company generated net cash of $62.3 million from operating activities compared with $26.6 million in the year-ago period. Capital expenditure in the year totaled $13.6 million, down 11.1% year over year.
During the same period, the company used $27.7 million for distributing dividends.
2024 Guidance
Flowserve continues to expect a 4-6% increase in revenues from the year-ago levels. The company anticipates earnings per share (on a reported basis) to be between $2.25 and $2.45. Adjusted earnings per share are now estimated in the $2.50-$2.70 band, higher than $2.40-$2.60 projected earlier.
The adjusted tax rate is projected to be approximately 20%. The company forecasts net interest expense and capital expenditure to be $60-$65 million and $75-$85 million, respectively.
Zacks Rank & Key Picks
Flowserve currently carries a Zacks Rank #3 (Hold).
Some better-ranked companies from the same space are discussed below.
Applied Industrial Technologies, Inc. (AIT - Free Report) presently sports a Zacks Rank #1 (Strong Buy). It has a trailing four-quarter average earnings surprise of 8.2%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for AIT’s fiscal 2024 (ending June 2024) earnings has increased 1.2% in the past 60 days.
Ingersoll Rand plc (IR - Free Report) currently carries a Zacks Rank of 2 (Buy). IR delivered a trailing four-quarter average earnings surprise of 15.9%.
In the past 60 days, the Zacks Consensus Estimate for Ingersoll Rand’s 2024 earnings has increased 1.6%.
Crane Company (CR - Free Report) presently flaunts a Zacks Rank of 1. The company delivered a trailing four-quarter average earnings surprise of 15.2%.
In the past 60 days, the Zacks Consensus Estimate for CR’s 2024 earnings has increased 4.9%.
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This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.
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Flowserve Corporation’s (FLS - Free Report) first-quarter 2024 adjusted earnings (excluding 2 cents from non-recurring items) of 58 cents per share beat the Zacks Consensus Estimate of 47 cents. The bottom line increased 45% year over year. Results primarily benefited from higher revenues, partially offset by an increase in operating costs and expenses.
Flowserve’s total sales of $1.09 billion beat the consensus estimate of $1.04 billion. The top line increased 10.9% year over year. Sales increased 10.6% on a constant-currency basis.
Aftermarket sales in the reported quarter increased 8.1% year over year (up 8.1% on a constant-currency basis) to $558.9 million. Original equipment sales totaled $528.6 million, reflecting an increase of 14.1% year over year (up 13.5% on a constant-currency basis).
Total bookings amounted to $1.04 billion in the quarter, reflecting a decrease of 1.8% (down 1.8% on a constant-currency basis) year over year. The backlog at the end of the reported quarter was $2.6 billion, down 6.9% year over year.
Segmental Details
FLS currently has two reportable segments, Flowserve Pump Division and Flow Control Division. A brief discussion of the segments is provided below:
Revenues from the Flowserve Pump Division segment were $769.4 million, up 9.9% year over year. Our estimate was $734.5 million. Bookings decreased 3.4% year over year to $703.5 million. Segmental operating income was $110.9 million, up 40.2% year over year.
Revenues from the Flow Control Division segment were $320.5 million, up 13.8% year over year. Our estimate was $302.2 million. Bookings of $341.1 million increased 2.7% on a year over year basis. The segment’s operating income was $34.7 million, up 87.6% year over year. Our estimate for the same was $32 million.
Margin Profile
In the first quarter, Flowserve’s cost of sales increased 9.5% year over year to $748.5 million. Gross profit increased 14.2% year over year to $339 million and the margin increased 90 basis points (bps) to 31.2%. Selling, general and administrative expenses were $228.4 million, down 6.5% year over year.
Operating income in the quarter increased 97.7% year over year to $113.1 million. The adjusted operating margin came in at 10.9%, up 260 bps year over year. The effective tax rate was 20.4% in the quarter.
Balance Sheet and Cash Flow
Exiting the first quarter, Flowserve had cash and cash equivalents of $532 million compared with $545.7 million at the end of December 2023. Long-term debt (due after one year) was $1.15 billion compared with $1.17 billion at the end of December 2023.
In first three months of 2024, the company generated net cash of $62.3 million from operating activities compared with $26.6 million in the year-ago period. Capital expenditure in the year totaled $13.6 million, down 11.1% year over year.
During the same period, the company used $27.7 million for distributing dividends.
2024 Guidance
Flowserve continues to expect a 4-6% increase in revenues from the year-ago levels. The company anticipates earnings per share (on a reported basis) to be between $2.25 and $2.45. Adjusted earnings per share are now estimated in the $2.50-$2.70 band, higher than $2.40-$2.60 projected earlier.
The adjusted tax rate is projected to be approximately 20%. The company forecasts net interest expense and capital expenditure to be $60-$65 million and $75-$85 million, respectively.
Zacks Rank & Key Picks
Flowserve currently carries a Zacks Rank #3 (Hold).
Some better-ranked companies from the same space are discussed below.
Applied Industrial Technologies, Inc. (AIT - Free Report) presently sports a Zacks Rank #1 (Strong Buy). It has a trailing four-quarter average earnings surprise of 8.2%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for AIT’s fiscal 2024 (ending June 2024) earnings has increased 1.2% in the past 60 days.
Ingersoll Rand plc (IR - Free Report) currently carries a Zacks Rank of 2 (Buy). IR delivered a trailing four-quarter average earnings surprise of 15.9%.
In the past 60 days, the Zacks Consensus Estimate for Ingersoll Rand’s 2024 earnings has increased 1.6%.
Crane Company (CR - Free Report) presently flaunts a Zacks Rank of 1. The company delivered a trailing four-quarter average earnings surprise of 15.2%.
In the past 60 days, the Zacks Consensus Estimate for CR’s 2024 earnings has increased 4.9%.
Research Chief Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.
Free: See Our Top Stock And 4 Runners Up
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