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Flowserve (FLS) to Report Q4 Earnings: What's in the Offing?
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Flowserve Corporation (FLS - Free Report) is scheduled to release fourth-quarter 2021 results on Feb 23, after market close.
The company surpassed estimates once in the last four quarters and missed it thrice, the surprise being a negative 1.27%, on average. Its third-quarter 2021 earnings of 29 cents per share lagged the Zacks Consensus Estimate of 40 cents by 27.50%.
Image Source: Zacks Investment Research
In the past three months, the company’s shares have lost 2.2% compared with the industry’s decline of 11.9%.
Factors at Play
Flowserve is likely to have benefited from its robust backlog level in the fourth quarter, which was $1.97 billion at the end of the previous quarter. Strength in the company’s oil and gas, chemical and power generation end markets, along with its strong original equipment and aftermarket bookings, is anticipated to have driven its performance in the quarter. The Zacks Consensus Estimate for fourth-quarter revenues from the company’s Flow Control Division segment is currently pegged at $294 million, indicating growth of 10.5% quarter-ago reported figure. The consensus estimate for its Flowserve Pump Division segment’s revenues stands at $657 million, indicating growth of 9.1% sequentially.
FLS’ multi-year Flowserve 2.0 strategy is likely to have enabled it to capture more margin enhancement opportunities with efficient cost management and higher productivity in the fourth quarter. Also, its focus on enhancing the sales process, along with its supply-chain initiatives, might get reflected in the to-be-reported-quarter results.
The company’s focus on product innovation and generating healthy free cash flow, along with its effective pricing actions and cost-saving measures, is likely to have been beneficial in the quarter. For 2021, the company expects to achieve run-rate cost savings of $125 million, including $78 million realized in the first three quarters.
Despite strength in end markets, supply chain challenges are expected to have adversely impacted Flowserve’s performance. Also, logistics issues and shortage of skilled labor might have affected its margins and profitability in the to-be-reported quarter. It’s worth noting that its adjusted operating margin declined 390 basis points year over year in the third quarter.
Although the company’s realignment plan is expected to provide benefits in the long run, expenditures associated with it might have hurt its earnings in the fourth quarter. The company’s net income was adversely impacted by realignment expenses of 2 cents per share in both the second and third quarters of 2021.
Earnings Whispers
According to our quantitative model, a stock needs to have the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or at least 3 (Hold) to increase the odds of an earnings beat. But that is not the case here, as we will see below.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Flowserve has an Earnings ESP of 0.00% as both the Most Accurate Estimate and the Zacks Consensus Estimate is pegged at 48 cents.
Here are some companies you may want to consider from the Zacks Industrial Products sector, as our model shows that these have the right combination of elements to post an earnings beat:
The Zacks Consensus Estimate for Franklin Electric’s earnings is pegged at 63 cents per share for the to-be-reported quarter. FELE’s shares have lost 11.9% in the past three months.
The Middleby Corporation (MIDD - Free Report) has an Earnings ESP of +3.18% and a Zacks Rank of 2, currently.
The Zacks Consensus Estimate for Middleby’s earnings is pegged at $2.07 per share for the fourth quarter of 2021. MIDD’s shares have lost 2% in the past three months.
Graphic Packaging Holding Company (GPK - Free Report) has an Earnings ESP of +1.12% and a Zacks Rank of 3 at present.
The Zacks Consensus Estimate for Graphic Packaging’s earnings is pegged at 37 cents per share for the to-be-reported quarter. GPK’s shares have lost 3.6% in the past three months.
Image: Bigstock
Flowserve (FLS) to Report Q4 Earnings: What's in the Offing?
Flowserve Corporation (FLS - Free Report) is scheduled to release fourth-quarter 2021 results on Feb 23, after market close.
The company surpassed estimates once in the last four quarters and missed it thrice, the surprise being a negative 1.27%, on average. Its third-quarter 2021 earnings of 29 cents per share lagged the Zacks Consensus Estimate of 40 cents by 27.50%.
Image Source: Zacks Investment Research
In the past three months, the company’s shares have lost 2.2% compared with the industry’s decline of 11.9%.
Factors at Play
Flowserve is likely to have benefited from its robust backlog level in the fourth quarter, which was $1.97 billion at the end of the previous quarter. Strength in the company’s oil and gas, chemical and power generation end markets, along with its strong original equipment and aftermarket bookings, is anticipated to have driven its performance in the quarter. The Zacks Consensus Estimate for fourth-quarter revenues from the company’s Flow Control Division segment is currently pegged at $294 million, indicating growth of 10.5% quarter-ago reported figure. The consensus estimate for its Flowserve Pump Division segment’s revenues stands at $657 million, indicating growth of 9.1% sequentially.
FLS’ multi-year Flowserve 2.0 strategy is likely to have enabled it to capture more margin enhancement opportunities with efficient cost management and higher productivity in the fourth quarter. Also, its focus on enhancing the sales process, along with its supply-chain initiatives, might get reflected in the to-be-reported-quarter results.
The company’s focus on product innovation and generating healthy free cash flow, along with its effective pricing actions and cost-saving measures, is likely to have been beneficial in the quarter. For 2021, the company expects to achieve run-rate cost savings of $125 million, including $78 million realized in the first three quarters.
Despite strength in end markets, supply chain challenges are expected to have adversely impacted Flowserve’s performance. Also, logistics issues and shortage of skilled labor might have affected its margins and profitability in the to-be-reported quarter. It’s worth noting that its adjusted operating margin declined 390 basis points year over year in the third quarter.
Although the company’s realignment plan is expected to provide benefits in the long run, expenditures associated with it might have hurt its earnings in the fourth quarter. The company’s net income was adversely impacted by realignment expenses of 2 cents per share in both the second and third quarters of 2021.
Earnings Whispers
According to our quantitative model, a stock needs to have the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or at least 3 (Hold) to increase the odds of an earnings beat. But that is not the case here, as we will see below.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Flowserve has an Earnings ESP of 0.00% as both the Most Accurate Estimate and the Zacks Consensus Estimate is pegged at 48 cents.
Flowserve Corporation Price and EPS Surprise
Flowserve Corporation price-eps-surprise | Flowserve Corporation Quote
Zacks Rank: The company carries a Zacks Rank #3.
Key Picks
Here are some companies you may want to consider from the Zacks Industrial Products sector, as our model shows that these have the right combination of elements to post an earnings beat:
Franklin Electric Co., Inc. (FELE - Free Report) has an Earnings ESP of +4.76% and a Zacks Rank of 1, currently. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Franklin Electric’s earnings is pegged at 63 cents per share for the to-be-reported quarter. FELE’s shares have lost 11.9% in the past three months.
The Middleby Corporation (MIDD - Free Report) has an Earnings ESP of +3.18% and a Zacks Rank of 2, currently.
The Zacks Consensus Estimate for Middleby’s earnings is pegged at $2.07 per share for the fourth quarter of 2021. MIDD’s shares have lost 2% in the past three months.
Graphic Packaging Holding Company (GPK - Free Report) has an Earnings ESP of +1.12% and a Zacks Rank of 3 at present.
The Zacks Consensus Estimate for Graphic Packaging’s earnings is pegged at 37 cents per share for the to-be-reported quarter. GPK’s shares have lost 3.6% in the past three months.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.