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Flowserve (FLS) to Report Q1 Earnings: What's in the Offing?

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Flowserve Corporation (FLS - Free Report) is scheduled to release first-quarter 2020 results on May 7, after market close.

The company surpassed estimates in each of the last four quarters, the positive earnings surprise being 8.34%, on average. Its fourth-quarter 2019 earnings of 66 cents per share surpassed the Zacks Consensus Estimate of 65 cents by 1.54%.

In the past three months, the company’s shares have lost 45.1% compared with the industry’s decline of 22.1%.

 

 

Factors at Play

Challenging conditions in the oil and gas end markets are expected to have adversely impacted bookings in the first quarter. Also, issues like commodity pricing, trade disruption and geopolitical uncertainties across the globe have caused delays in capital spending. These are likely to have hurt Flowserve's top-line performance.

Also, several of the company’s manufacturing facilities, global technology and engineering centers, quick response centers, and corporate headquarters have suffered temporary shutdowns, owing to the coronavirus outbreak. Notably, the impacts of the pandemic on its supply chain as well as the demand for its products and services along with the governmental regulations imposed in response to the crisis are anticipated to get reflected in Flowserve’s first-quarter results. Notably, the Zacks Consensus Estimate for first-quarter revenues from the company’s Flow Control Division segment is currently pegged at $273 million, indicating a decline of 3.2% from the year-ago reported figure.

Although Flowserve's realignment plan will benefit it in the long run, it has been increasing its expenses. We expect high restructuring costs to have affected the company’s first-quarter earnings. In addition, huge debt levels are likely to have negatively impacted Flowserve. Further, the company, which generates significant revenues from overseas operations, has been vulnerable to foreign exchange issues, which are expected to have affected both top and bottom-line performance in the first quarter.

However, the company’s investments in organic growth and other industrial opportunities as well as improved operating leverage are expected to have aided its profitability.

Earnings Whispers

According to our quantitative model, a stock needs to have the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or at least 3 (Hold) to increase the odds of an earnings beat. But that is not the case here as we will see below.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: Flowserve has an Earnings ESP of +1.52%.

Flowserve Corporation Price and EPS Surprise

 

Flowserve Corporation Price and EPS Surprise

Flowserve Corporation price-eps-surprise | Flowserve Corporation Quote

Zacks Rank: Flowserve carries a Zacks Rank #4 (Sell).

Stocks to Consider

Here are some companies you may want to consider as our model shows that these have the right mix of elements to beat estimates this earnings season:

Intellicheck, Inc. (IDN - Free Report) has an Earnings ESP of +66.67% and a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Axon Enterprise, Inc. currently has an Earnings ESP of +18.31% and a Zacks Rank #3.

Ball Corporation (BLL - Free Report) presently has an Earnings ESP of +1.56% and a Zacks Rank of 3.

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