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Flowserve (FLS) Q1 Earnings & Revenues Top Estimates, Rise Y/Y
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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.
Flowserve Corporation Price, Consensus and EPS Surprise
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.
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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Flowserve (FLS) Q1 Earnings & Revenues Top Estimates, Rise Y/Y
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.
Flowserve Corporation Price, Consensus and EPS Surprise
Flowserve Corporation price-consensus-eps-surprise-chart | Flowserve Corporation Quote
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%.