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Flowserve (FLS) Q4 Earnings & Revenues Top Estimates, Up Y/Y
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Flowserve Corporation’s (FLS - Free Report) fourth-quarter 2023 adjusted earnings (excluding 21 cents from non-recurring items) of 68 cents per share beat the Zacks Consensus Estimate of 61 cents. The bottom line increased 7.9% year over year. Results were primarily benefited from higher revenues, partially offset by an increase in operating costs and expenses.
Flowserve’s total sales of $1,165.2 million beat the consensus estimate of $1,136 million. The top line increased 12.1% year over year. Sales increased 10.1% on a constant-currency basis.
Aftermarket sales in the reported quarter increased 9.3% year over year (up 7.2% on a constant-currency basis) to $589.1 million. Original equipment sales totaled $576.1 million, reflecting an increase of 15.3% (up 13.1% on a constant-currency basis).
Bookings totaled $1.04 billion in the quarter, reflecting a decrease of 5.7% (down 7.1% on a constant-currency basis) from the year-ago quarter. The backlog at the end of the reported quarter was $2.70 billion, down 1.5% year over year.
Segmental Details
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 segment were $832.8 million, up 12.6% year over year. Our estimate for the segment’s revenues was $802 million. Bookings decreased 8.1% to $722.2 million. Segmental operating income was $93.5 million for the quarter, up 3.1% year over year.
Revenues from the Flow Control Division segment were $336 million, up 11.3% year over year. Our estimate for segmental revenues was $331.1 million. Bookings of $326.9 million increased 0.6%. The segment’s operating income was $49.8 million for the quarter, up 30.7% year over year. Our estimate for the same was $40 million.
Flowserve Corporation Price, Consensus and EPS Surprise
In the fourth quarter, Flowserve’s cost of sales increased 11% year over year to $825.6 million. Gross profit increased 15% to $339.5 million and the margin increased 70 basis points (bps) to 29.1%. Selling, general and administrative expenses were $234.7 million, up 21.2% year over year.
Operating income in the quarter increased 4% year over year to $109.5 million. The adjusted operating margin came in at 10.5%, down 30 bps year over year. The effective tax rate was 7.8% in the quarter.
Balance Sheet and Cash Flow
Exiting the fourth quarter, Flowserve had cash and cash equivalents of $545.7 million compared with $435 million at the end of December 2022. Long-term debt (due after one year) was $1.17 billion compared with $1.22 billion at the end of December 2022.
In 2023, the company generated net cash of $325.8 million from operating activities against $40 million used in the year-ago period. Capital expenditure in the year totaled $67.4 million, down 11.7% from the previous year.
During the same period, the company used $105 million for distributing dividends.
2024 Guidance
Flowserve expects a 4-6% year-over-year increase in revenues. The company anticipates earnings per share (on a reported basis) to be between $2.25 and $2.45. Adjusted earnings per share are estimated in the $2.40-$2.60 band.
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 & Other Key Picks
Flowserve currently carries a Zacks Rank #2 (Buy).
Some other top-ranked companies from the Industrial Products sector are discussed below.
Parker-Hannifin Corporation (PH - Free Report) presently carries a Zacks Rank #2. PH delivered a trailing four-quarter average earnings surprise of 14.4%. In the past 60 days, the Zacks Consensus Estimate for its 2024 earnings has increased 2.7%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Applied Industrial Technologies Inc. (AIT - Free Report) presently has a Zacks Rank of 2. AIT delivered a trailing four-quarter average earnings surprise of 10.4%. In the past 60 days, the Zacks Consensus Estimate for Applied Industrial’s 2024 earnings has increased 0.7%.
Tetra Tech Inc. (TTEK - Free Report) presently has a Zacks Rank of 2. TTEK delivered a trailing four-quarter average earnings surprise of 14.4%. In the past 60 days, the Zacks Consensus Estimate for Tetra Tech’s 2024 earnings has increased 2.9%.
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Flowserve (FLS) Q4 Earnings & Revenues Top Estimates, Up Y/Y
Flowserve Corporation’s (FLS - Free Report) fourth-quarter 2023 adjusted earnings (excluding 21 cents from non-recurring items) of 68 cents per share beat the Zacks Consensus Estimate of 61 cents. The bottom line increased 7.9% year over year. Results were primarily benefited from higher revenues, partially offset by an increase in operating costs and expenses.
Flowserve’s total sales of $1,165.2 million beat the consensus estimate of $1,136 million. The top line increased 12.1% year over year. Sales increased 10.1% on a constant-currency basis.
Aftermarket sales in the reported quarter increased 9.3% year over year (up 7.2% on a constant-currency basis) to $589.1 million. Original equipment sales totaled $576.1 million, reflecting an increase of 15.3% (up 13.1% on a constant-currency basis).
Bookings totaled $1.04 billion in the quarter, reflecting a decrease of 5.7% (down 7.1% on a constant-currency basis) from the year-ago quarter. The backlog at the end of the reported quarter was $2.70 billion, down 1.5% year over year.
Segmental Details
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 segment were $832.8 million, up 12.6% year over year. Our estimate for the segment’s revenues was $802 million. Bookings decreased 8.1% to $722.2 million. Segmental operating income was $93.5 million for the quarter, up 3.1% year over year.
Revenues from the Flow Control Division segment were $336 million, up 11.3% year over year. Our estimate for segmental revenues was $331.1 million. Bookings of $326.9 million increased 0.6%. The segment’s operating income was $49.8 million for the quarter, up 30.7% year over year. Our estimate for the same was $40 million.
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 increased 11% year over year to $825.6 million. Gross profit increased 15% to $339.5 million and the margin increased 70 basis points (bps) to 29.1%. Selling, general and administrative expenses were $234.7 million, up 21.2% year over year.
Operating income in the quarter increased 4% year over year to $109.5 million. The adjusted operating margin came in at 10.5%, down 30 bps year over year. The effective tax rate was 7.8% in the quarter.
Balance Sheet and Cash Flow
Exiting the fourth quarter, Flowserve had cash and cash equivalents of $545.7 million compared with $435 million at the end of December 2022. Long-term debt (due after one year) was $1.17 billion compared with $1.22 billion at the end of December 2022.
In 2023, the company generated net cash of $325.8 million from operating activities against $40 million used in the year-ago period. Capital expenditure in the year totaled $67.4 million, down 11.7% from the previous year.
During the same period, the company used $105 million for distributing dividends.
2024 Guidance
Flowserve expects a 4-6% year-over-year increase in revenues. The company anticipates earnings per share (on a reported basis) to be between $2.25 and $2.45. Adjusted earnings per share are estimated in the $2.40-$2.60 band.
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 & Other Key Picks
Flowserve currently carries a Zacks Rank #2 (Buy).
Some other top-ranked companies from the Industrial Products sector are discussed below.
Parker-Hannifin Corporation (PH - Free Report) presently carries a Zacks Rank #2. PH delivered a trailing four-quarter average earnings surprise of 14.4%. In the past 60 days, the Zacks Consensus Estimate for its 2024 earnings has increased 2.7%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Applied Industrial Technologies Inc. (AIT - Free Report) presently has a Zacks Rank of 2. AIT delivered a trailing four-quarter average earnings surprise of 10.4%. In the past 60 days, the Zacks Consensus Estimate for Applied Industrial’s 2024 earnings has increased 0.7%.
Tetra Tech Inc. (TTEK - Free Report) presently has a Zacks Rank of 2. TTEK delivered a trailing four-quarter average earnings surprise of 14.4%. In the past 60 days, the Zacks Consensus Estimate for Tetra Tech’s 2024 earnings has increased 2.9%.