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Flowserve (FLS) Q1 Earnings In Line, Sales Beat Estimates
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Flowserve Corporation (FLS - Free Report) reported first-quarter 2018 adjusted earnings of 27 cents per share, which came in line with the Zacks Consensus Estimate. On a year-over-year basis, the bottom-line figure improved 8% backed by robust sales growth.
The company’s earnings per share came in at 12 cents on a reported basis, which included pre-tax adjusted items of $25 million.
Quarter in Detail
In the quarter under review, sales increased 6.2% year over year to $920 million. The reported figure surpassed the Zacks Consensus Estimate of $884 million. Solid growth in sales across the company’s two of the three segments drove the overall top line.
The company’s bookings totaled $929 million, down 3% year over year. The downside can be attributed to divested businesses. After-market bookings amounted to $482 million, up 5.4%.
Adjusted gross margin was 30.3% in the first quarter compared with 31.5% in the year-ago quarter. Operating income in the reported quarter increased to $62.4 million from $60.9 million in the first-quarter 2017. Adjusted operating margin was 6.8% compared with 7% for the prior-year period.
Segmental Details
Engineered Product Division sales increased 10.1% year over year to $467.7 million in the reported quarter. However, bookings declined 7.9% year over year to $424.3 million.
Sales at the Industrial Product Division were up 11% year over year to $198.1 million. Nonetheless, bookings decreased 4% to $198.5 million.
Flowserve Corporation Price, Consensus and EPS Surprise
Flow Control Division’s sales declined 1.1% year over year to $277.2 million. At the segment, bookings improved 5.6% year over year to $327.3 million.
Balance Sheet & Cash Flow
Flowserve ended the first quarter with cash and cash equivalents of about $535.7 million compared with $325.8 million as of Mar 31, 2017. As of Mar 31, 2018, the company’s long-term debt totaled $1,501.4 million, marginally up from $1,499.6 million as of Dec 31, 2017.
Net cash flow used by operating activities was $120.7 million for the reported quarter compared with net cash flow of $3.9 million provided by operating activities in the prior-year period.
2018 View
Concurrent with the first-quarter 2018 results, Flowserve reiterated its 2018 outlook. The company continues to expect adjusted earnings per share in the band of $1.50-$1.70. Revenues are also projected to increase in the range of 3-6%.
Our Take
Flowserve’s leading position in the flow control industry along with its resilient aftermarket business, diligent restructuring plans and geographical diversity are expected to drive the company's growth momentum. Moreover, the company is set to benefit from rising short-cycle investments as client spending increases, driven by improved macroeconomic environment and stable oil prices. In addition, stabilized core energy markets signal brighter days ahead.
However, over the past few quarters, pricing pressure has proved to be a major drag on the Zacks Rank #3 (Hold) company’s top-line performance.
Stocks to Consider
Some better-ranked stocks in the same space are Applied Industrial Technologies, Inc. (AIT - Free Report) , Roper Technologies, Inc. (ROP - Free Report) and Sun Hydraulics Corporation . While Applied Industrial Technologies sports a Zacks Rank #1 (Strong Buy), Roper Technologies and Sun Hydraulics carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Applied Industrial Technologies has an excellent earnings surprise history, having surpassed estimates in the trailing four quarters, with an average beat of 11.6%.
Roper Technologieshas an impressive earnings surprise history, having exceeded estimates in the trailing four quarters, with an average beat of 2.9%.
Sun Hydraulics has a decent earnings surprise history, having outpaced estimates thrice in the trailing four quarters, with an average beat of 15.3%.
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Flowserve (FLS) Q1 Earnings In Line, Sales Beat Estimates
Flowserve Corporation (FLS - Free Report) reported first-quarter 2018 adjusted earnings of 27 cents per share, which came in line with the Zacks Consensus Estimate. On a year-over-year basis, the bottom-line figure improved 8% backed by robust sales growth.
The company’s earnings per share came in at 12 cents on a reported basis, which included pre-tax adjusted items of $25 million.
Quarter in Detail
In the quarter under review, sales increased 6.2% year over year to $920 million. The reported figure surpassed the Zacks Consensus Estimate of $884 million. Solid growth in sales across the company’s two of the three segments drove the overall top line.
The company’s bookings totaled $929 million, down 3% year over year. The downside can be attributed to divested businesses. After-market bookings amounted to $482 million, up 5.4%.
Adjusted gross margin was 30.3% in the first quarter compared with 31.5% in the year-ago quarter. Operating income in the reported quarter increased to $62.4 million from $60.9 million in the first-quarter 2017. Adjusted operating margin was 6.8% compared with 7% for the prior-year period.
Segmental Details
Engineered Product Division sales increased 10.1% year over year to $467.7 million in the reported quarter. However, bookings declined 7.9% year over year to $424.3 million.
Sales at the Industrial Product Division were up 11% year over year to $198.1 million. Nonetheless, bookings decreased 4% to $198.5 million.
Flowserve Corporation Price, Consensus and EPS Surprise
Flowserve Corporation Price, Consensus and EPS Surprise | Flowserve Corporation Quote
Flow Control Division’s sales declined 1.1% year over year to $277.2 million. At the segment, bookings improved 5.6% year over year to $327.3 million.
Balance Sheet & Cash Flow
Flowserve ended the first quarter with cash and cash equivalents of about $535.7 million compared with $325.8 million as of Mar 31, 2017. As of Mar 31, 2018, the company’s long-term debt totaled $1,501.4 million, marginally up from $1,499.6 million as of Dec 31, 2017.
Net cash flow used by operating activities was $120.7 million for the reported quarter compared with net cash flow of $3.9 million provided by operating activities in the prior-year period.
2018 View
Concurrent with the first-quarter 2018 results, Flowserve reiterated its 2018 outlook. The company continues to expect adjusted earnings per share in the band of $1.50-$1.70. Revenues are also projected to increase in the range of 3-6%.
Our Take
Flowserve’s leading position in the flow control industry along with its resilient aftermarket business, diligent restructuring plans and geographical diversity are expected to drive the company's growth momentum. Moreover, the company is set to benefit from rising short-cycle investments as client spending increases, driven by improved macroeconomic environment and stable oil prices. In addition, stabilized core energy markets signal brighter days ahead.
However, over the past few quarters, pricing pressure has proved to be a major drag on the Zacks Rank #3 (Hold) company’s top-line performance.
Stocks to Consider
Some better-ranked stocks in the same space are Applied Industrial Technologies, Inc. (AIT - Free Report) , Roper Technologies, Inc. (ROP - Free Report) and Sun Hydraulics Corporation . While Applied Industrial Technologies sports a Zacks Rank #1 (Strong Buy), Roper Technologies and Sun Hydraulics carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Applied Industrial Technologies has an excellent earnings surprise history, having surpassed estimates in the trailing four quarters, with an average beat of 11.6%.
Roper Technologieshas an impressive earnings surprise history, having exceeded estimates in the trailing four quarters, with an average beat of 2.9%.
Sun Hydraulics has a decent earnings surprise history, having outpaced estimates thrice in the trailing four quarters, with an average beat of 15.3%.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>