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Flowserve (FLS) Q4 Earnings & Revenues Miss Estimates, Down Y/Y
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Flowserve Corporation (FLS - Free Report) reported weaker-than-expected fourth-quarter 2021 results, wherein earnings and sales missed estimates by 6.3% and 3.1%, respectively.
The company’s share price decreased 6% yesterday, eventually closing the trading session at $29.70.
In the reported quarter, the machinery company’s adjusted earnings were 45 cents per share, lagging the Zacks Consensus Estimate of 48 cents. The bottom line decreased 15.1% from the year-ago figure of 53 cents due to lower sales.
In 2021, the company’s earnings came in at $1.38, a decrease of 20.7% on a year-over-year basis.
Revenue Details
In the fourth quarter, Flowserve’s sales were $919.5 million, reflecting a year-over-year decline of 6.7%. The metric was down 5.7% on a constant currency basis.
The company’s top line missed the Zacks Consensus Estimate of $949 million.
Aftermarket sales in the reported quarter were up 0.7% year over year (or up 1.8% on a constant-currency basis) to $481.8 million. Original equipment sales totaled $437.6 million, reflecting a decrease of 13.7% (or down 12.7% on a constant-currency basis).
Bookings totaled $969.1 million in the quarter, reflecting an increase of 17.5% (or 18.9% on a constant-currency basis) from the year-ago quarter. Backlog at the end of the reported quarter was $2 billion.
The company 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 were $648.9 million, decreasing 6.7% year over year or 5.6% on a constant-currency basis. Bookings rose 22.4% to $693.5 million.
Revenues from the Flow Control Division were $272.8 million, decreasing 6.2% year over year or 5.6% on a constant-currency basis. Bookings of $278.8 million increased 7.9%.
In 2021, the company’s revenues came in at $1,075.9 million, up 1.7% year over year.
Flowserve Corporation Price, Consensus and EPS Surprise
In the fourth quarter, Flowserve’s cost of sales decreased 5.7% year over year to $652.4 million. It represented 71% of sales compared with 70% in the year-ago quarter. Gross profit decreased 9.6% to $267.1 million, and margin contracted 20 basis points (bps) to 29%. Selling, general and administrative expenses were $187.1 million, down 7.7% year over year. It represented 20.3% of sales.
Adjusted operating income in the quarter decreased 23.6% year over year to $85.4 million. Adjusted operating margin decreased 200 bps to 9.3%. Net interest and other expenses (adjusted) jumped 7.6% to $62 million. Effective tax rate was 14.8% compared with 21% in the year-ago quarter.
Balance Sheet and Cash Flow
Exiting the fourth quarter of 2021, Flowserve had cash and cash equivalents of $658.5 million, down from $1,457.3 million at the previous quarter-end. Long-term debt was $1,261.8 million, down 0.8% on a sequential basis.
In 2021, it generated net cash of $250.1 million from operating activities, down 19.5% from the previous year. Capital expenditure in the period totaled $54.9 million, decreasing 4.3% from $57.4 million spent a year ago.
During the year, the company used $104.6 million for distributing dividends and $17.5 million for repurchasing shares.
Outlook
For 2022, the company expects revenues to grow 7-9% year over year. It predicts adjusted earnings per share in the range of $1.70-$1.90. For the year, the adjusted tax rate is expected to be 20-22%.
For the year, its interest expense (net) is anticipated to be $45-$50 million, while capital expenditures are likely to be $70-$80 million.
Zacks Rank & Stocks to Consider
The company currently carries a Zacks Rank #3 (Hold).
Some better-ranked companies in the industry are discussed below.
Dover’s earnings estimates increased 2% for 2022 in the past 30 days. Its shares have lost 9.2% in the past three months.
Standex International Corporation (SXI - Free Report) presently has a Zacks Rank #2. Its earnings surprise in the last four quarters was 5.85%, on average.
In the past 30 days, Standex’s earnings estimates have increased 5.9% for fiscal 2022 (ending June 2022). SXI’s shares have lost 3.7% in the past three months.
Nordson Corporation (NDSN - Free Report) presently carries a Zacks Rank #2. Its earnings surprise in the last four quarters was 9.85%, on average.
In the past 30 days, Nordson’s earnings estimates have increased 0.8% for 2022. NDSN’s shares have lost 14.2% in the past three months.
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Flowserve (FLS) Q4 Earnings & Revenues Miss Estimates, Down Y/Y
Flowserve Corporation (FLS - Free Report) reported weaker-than-expected fourth-quarter 2021 results, wherein earnings and sales missed estimates by 6.3% and 3.1%, respectively.
The company’s share price decreased 6% yesterday, eventually closing the trading session at $29.70.
In the reported quarter, the machinery company’s adjusted earnings were 45 cents per share, lagging the Zacks Consensus Estimate of 48 cents. The bottom line decreased 15.1% from the year-ago figure of 53 cents due to lower sales.
In 2021, the company’s earnings came in at $1.38, a decrease of 20.7% on a year-over-year basis.
Revenue Details
In the fourth quarter, Flowserve’s sales were $919.5 million, reflecting a year-over-year decline of 6.7%. The metric was down 5.7% on a constant currency basis.
The company’s top line missed the Zacks Consensus Estimate of $949 million.
Aftermarket sales in the reported quarter were up 0.7% year over year (or up 1.8% on a constant-currency basis) to $481.8 million. Original equipment sales totaled $437.6 million, reflecting a decrease of 13.7% (or down 12.7% on a constant-currency basis).
Bookings totaled $969.1 million in the quarter, reflecting an increase of 17.5% (or 18.9% on a constant-currency basis) from the year-ago quarter. Backlog at the end of the reported quarter was $2 billion.
The company 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 were $648.9 million, decreasing 6.7% year over year or 5.6% on a constant-currency basis. Bookings rose 22.4% to $693.5 million.
Revenues from the Flow Control Division were $272.8 million, decreasing 6.2% year over year or 5.6% on a constant-currency basis. Bookings of $278.8 million increased 7.9%.
In 2021, the company’s revenues came in at $1,075.9 million, up 1.7% year over year.
Flowserve Corporation Price, Consensus and EPS Surprise
Flowserve Corporation price-consensus-eps-surprise-chart | Flowserve Corporation Quote
Margin Profile
In the fourth quarter, Flowserve’s cost of sales decreased 5.7% year over year to $652.4 million. It represented 71% of sales compared with 70% in the year-ago quarter. Gross profit decreased 9.6% to $267.1 million, and margin contracted 20 basis points (bps) to 29%. Selling, general and administrative expenses were $187.1 million, down 7.7% year over year. It represented 20.3% of sales.
Adjusted operating income in the quarter decreased 23.6% year over year to $85.4 million. Adjusted operating margin decreased 200 bps to 9.3%. Net interest and other expenses (adjusted) jumped 7.6% to $62 million. Effective tax rate was 14.8% compared with 21% in the year-ago quarter.
Balance Sheet and Cash Flow
Exiting the fourth quarter of 2021, Flowserve had cash and cash equivalents of $658.5 million, down from $1,457.3 million at the previous quarter-end. Long-term debt was $1,261.8 million, down 0.8% on a sequential basis.
In 2021, it generated net cash of $250.1 million from operating activities, down 19.5% from the previous year. Capital expenditure in the period totaled $54.9 million, decreasing 4.3% from $57.4 million spent a year ago.
During the year, the company used $104.6 million for distributing dividends and $17.5 million for repurchasing shares.
Outlook
For 2022, the company expects revenues to grow 7-9% year over year. It predicts adjusted earnings per share in the range of $1.70-$1.90. For the year, the adjusted tax rate is expected to be 20-22%.
For the year, its interest expense (net) is anticipated to be $45-$50 million, while capital expenditures are likely to be $70-$80 million.
Zacks Rank & Stocks to Consider
The company currently carries a Zacks Rank #3 (Hold).
Some better-ranked companies in the industry are discussed below.
Dover Corporation (DOV - Free Report) presently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. It delivered a four-quarter earnings surprise of 12.34%, on average.
Dover’s earnings estimates increased 2% for 2022 in the past 30 days. Its shares have lost 9.2% in the past three months.
Standex International Corporation (SXI - Free Report) presently has a Zacks Rank #2. Its earnings surprise in the last four quarters was 5.85%, on average.
In the past 30 days, Standex’s earnings estimates have increased 5.9% for fiscal 2022 (ending June 2022). SXI’s shares have lost 3.7% in the past three months.
Nordson Corporation (NDSN - Free Report) presently carries a Zacks Rank #2. Its earnings surprise in the last four quarters was 9.85%, on average.
In the past 30 days, Nordson’s earnings estimates have increased 0.8% for 2022. NDSN’s shares have lost 14.2% in the past three months.