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Flowserve (FLS) Withdraws Annual View on Coronavirus Concerns

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Flowserve Corporation FLS has withdrawn its earlier announced guidance for 2020 on end-market uncertainties due to the coronavirus pandemic.

The company noted that several of its manufacturing facilities, global technology and engineering centers, quick response centers, and corporate headquarters have suffered temporarily shutdowns, owing to the coronavirus outbreak. However, it remains committed to protect the safety, health and well-being of employees, customers and partners amid the crisis.

Guidance Withdrawn

On the fourth-quarter 2019 conference call held in February, Flowserve had anticipated adjusted earnings of $2.30-$2.45 per share for 2020, suggesting year-over-year growth of 8% at the mid-point.

Also, for the year, the company had expected revenues growth of 3-5%, while net interest expenses were estimated to be $45-$50. Also, the company’s capital expenditure was projected to be $90-$100 million.

However, on uncertainties, regarding the impacts of the outbreak on financial and operating results, Flowserve has now withdrawn its guidance for 2020.

Notably, the duration of the coronavirus pandemic, its geographic spread and the impacts of the governmental regulations imposed in response to the crisis will likely have a bearing on the company’s results. This along with its impacts on the demand for its products and services will likely get reflected in the yearly results.

Bottom Line

The COVID-19 pandemic has dealt a further blow to the manufacturing sector, which was already reeling under the U.S.-China trade tensions and weak global demand. Factory closures across the globe, supply-chain disruptions, low demand for goods and the impacts of the restrictions imposed by several governments, among others, have affected the sector.

There has been a spate of guidance withdrawals by the industry participants lately on account of the volatile situation, arising from the pandemic, and its impact on their performance. Companies such as Barnes Group, Inc. B, Xylem Inc. (XYL - Free Report) and Stanley Black & Decker, Inc. SWK have withdrawn their previously announced guidance.

Zacks Rank, Price Performance and Estimate Trend

Flowserve, with a $3.4-billion market capitalization, currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

In the past month, the company’s share price has decreased 12.9% compared with the industry’s decline of 14%.



In the past 30 days, the Zacks Consensus Estimate for its earnings has been lowered by 16.3% to $2.01 for 2020 and by 23.3% to $2.07 for 2021.

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