Latest news with #FlowserveBusinessSystem
Yahoo
13-05-2025
- Business
- Yahoo
FLS Q1 Earnings Call: Pricing Actions and Supply Chain Initiatives Drive Outperformance Amid Tariff Uncertainty
Flow control equipment manufacturer Flowserve (NYSE:FLS) reported Q1 CY2025 results beating Wall Street's revenue expectations , with sales up 5.2% year on year to $1.14 billion. Its non-GAAP profit of $0.72 per share was 19.6% above analysts' consensus estimates. Is now the time to buy FLS? Find out in our full research report (it's free). Revenue: $1.14 billion vs analyst estimates of $1.1 billion (5.2% year-on-year growth, 3.6% beat) Adjusted EPS: $0.72 vs analyst estimates of $0.60 (19.6% beat) Adjusted EBITDA: $171.5 million vs analyst estimates of $144.8 million (15% margin, 18.4% beat) Management reiterated its full-year Adjusted EPS guidance of $3.20 at the midpoint Operating Margin: 11.5%, up from 10.4% in the same quarter last year Free Cash Flow was -$61.67 million, down from $48.65 million in the same quarter last year Backlog: $2.9 billion at quarter end, up 11.1% year on year Market Capitalization: $6.64 billion Flowserve's first quarter results were shaped by robust aftermarket demand and strong execution across its business systems. CEO Scott Rowe credited the company's performance to high service levels in its aftermarket division, which secured a major nuclear power plant upgrade, and to operational improvements from the 80-20 complexity reduction program. CFO Amy Schwetz noted that early-year price increases and disciplined cost control further supported margin expansion, while the integration of recent acquisitions, such as MOGAS, contributed positively to earnings. Management's forward-looking guidance remains cautious, with attention to the evolving tariff environment and macroeconomic uncertainties. Rowe explained that Flowserve's global manufacturing footprint and ability to shift sourcing are central to mitigating tariff impacts, but he acknowledged that sustained uncertainty or further trade policy changes could pressure future bookings. Schwetz reiterated guidance for margin expansion, attributing confidence to operational levers and ongoing benefits from the Flowserve Business System, while emphasizing the company's readiness to respond quickly if conditions deteriorate. Flowserve's first quarter was influenced by high aftermarket activity, strong nuclear sector orders, and progress in operational initiatives. Management highlighted several factors impacting both the quarter's performance and the company's outlook amid a shifting trade landscape. Aftermarket and Nuclear Orders: Aftermarket bookings reached nearly $690 million, including a significant nuclear power plant upgrade order, marking the fourth consecutive quarter above $600 million. Nuclear-related activity exceeded $100 million for the third straight quarter, supporting the backlog and visibility into future revenue. Pricing Actions and Tariff Response: The company implemented two price increases—one annual and one targeted in March—to offset new tariff impacts. Management emphasized proactive engagement with customers and the use of change orders to reprice projects in the backlog where possible. Supply Chain Adaptability: Flowserve's global manufacturing and sourcing flexibility was cited as a competitive advantage. The company is actively relocating production and sourcing to regions with lower tariff exposure, aiming to mitigate a potential $90–$100 million annualized gross tariff impact. Operational Excellence Programs: The ongoing 80-20 complexity reduction and Flowserve Business System initiatives have improved productivity and margins. Management reported that SKU rationalization reduced complexity at key sites, with expectations for further benefits by midyear. MOGAS Acquisition Integration: The integration of MOGAS, specializing in severe service valves, is ahead of schedule. Despite lighter project bookings, the aftermarket business remains strong, and cost synergies are materializing, contributing to gross margin improvements. Looking ahead, Flowserve's performance will depend on its ability to navigate tariffs, maintain momentum in aftermarket and nuclear markets, and continue operational improvements. Tariff Mitigation Efforts: Management aims to offset increased costs through pricing, supply chain adjustments, and leveraging trade agreements. The timing of these actions versus tariff implementation remains a risk to margin performance in the second half of the year. Aftermarket and Nuclear Visibility: Continued strength in aftermarket services and nuclear sector orders provides near-term revenue certainty, especially given multi-quarter visibility on large nuclear projects. Operational Initiatives: Expansion of the 80-20 program and the Flowserve Business System is expected to drive further gross margin gains and working capital efficiencies, supporting the company's goal of 100 basis points of operating margin expansion for the year. Andy Kaplowitz (Citigroup): Asked about the sustainability of high aftermarket bookings; management responded that while recent nuclear orders may not repeat, the elevated run rate and project funnel support continued strength unless macro conditions worsen. Mike Halloran (Baird): Inquired about Flowserve's manufacturing footprint and pricing power; Rowe described regional manufacturing as a competitive advantage and outlined aggressive price actions to stay ahead of cost pressures. Deane Dray (RBC Capital Markets): Sought clarification on pricing dynamics between aftermarket and original equipment; management said aftermarket pricing is stickier due to lead times and urgency, while project repricing is enabled through updated contract terms. Nathan Jones (Stifel): Questioned visibility into the project pipeline and timing of tariff impacts; Rowe explained that large projects provide year-ahead visibility, with nuclear projects tracked two years out, and Schwetz noted that margin pressure from tariffs is expected to intensify in the second half. Joe Giordano (TD Cowen): Asked about clean energy project funding and macro assumptions in guidance; management said decarbonization remains active, with guidance based on current tariff and demand signals, and built-in contingencies for demand softness if conditions weaken. In the coming quarters, the StockStory team will watch (1) the effectiveness of Flowserve's tariff mitigation strategies and whether pricing actions hold amid potential customer resistance, (2) the pace of margin expansion and working capital improvement from operational programs, and (3) ongoing momentum in aftermarket and nuclear bookings, which underpin revenue visibility. Progress on MOGAS integration and additional supply chain adjustments will also be key markers. Flowserve currently trades at a forward P/E ratio of 15.8×. In the wake of earnings, is it a buy or sell? See for yourself in our free research report. The market surged in 2024 and reached record highs after Donald Trump's presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025. While the crowd speculates what might happen next, we're homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver's seat and build a durable portfolio by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years. Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
09-05-2025
- Business
- Yahoo
Q1 Earnings Review: Gas and Liquid Handling Stocks Led by Flowserve (NYSE:FLS)
Looking back on gas and liquid handling stocks' Q1 earnings, we examine this quarter's best and worst performers, including Flowserve (NYSE:FLS) and its peers. Gas and liquid handling companies possess the technical know-how and specialized equipment to handle valuable (and sometimes dangerous) substances. Lately, water conservation and carbon capture–which requires hydrogen and other gasses as well as specialized infrastructure–have been trending up, creating new demand for products such as filters, pumps, and valves. On the other hand, gas and liquid handling companies are at the whim of economic cycles. Consumer spending and interest rates, for example, can greatly impact the industrial production that drives demand for these companies' offerings. The 11 gas and liquid handling stocks we track reported a strong Q1. As a group, revenues beat analysts' consensus estimates by 0.9% while next quarter's revenue guidance was in line. Thankfully, share prices of the companies have been resilient as they are up 9.1% on average since the latest earnings results. Manufacturing the largest pump ever built for nuclear power generation, Flowserve (NYSE:FLS) manufactures and sells flow control equipment for various industries. Flowserve reported revenues of $1.14 billion, up 5.2% year on year. This print exceeded analysts' expectations by 3.6%. Overall, it was an exceptional quarter for the company with an impressive beat of analysts' EBITDA estimates. 'Our first quarter results were a strong start to the year, with robust bookings growth, margin expansion, and earnings acceleration all driven by healthy end markets and improved execution. These results demonstrate the strength of our diversified portfolio and the exceptional performance of our associates around the world operating under the Flowserve Business System,' said Scott Rowe, Flowserve's President and Chief Executive Officer. Interestingly, the stock is up 6.7% since reporting and currently trades at $47.91. Is now the time to buy Flowserve? Access our full analysis of the earnings results here, it's free. Founded on the principle of treating others as one wants to be treated, Helios (NYSE:HLIO) designs, manufactures, and sells motion and electronic control components for various sectors. Helios reported revenues of $195.5 million, down 7.8% year on year, outperforming analysts' expectations by 3.8%. The business had an exceptional quarter with a solid beat of analysts' organic revenue and EBITDA estimates. Helios pulled off the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 15.6% since reporting. It currently trades at $31.34. Is now the time to buy Helios? Access our full analysis of the earnings results here, it's free. Started with the invention of the steam drill, Ingersoll Rand (NYSE:IR) provides mission-critical air, gas, liquid, and solid flow creation solutions. Ingersoll Rand reported revenues of $1.72 billion, up 2.8% year on year, in line with analysts' expectations. It was a slower quarter as it posted full-year EBITDA guidance missing analysts' expectations. Interestingly, the stock is up 4% since the results and currently trades at $79.23. Read our full analysis of Ingersoll Rand's results here. Playing a crucial role in the development of the first transatlantic television transmission in 1956, ITT (NYSE:ITT) provides motion and fluid handling equipment for various industries ITT reported revenues of $913 million, flat year on year. This number surpassed analysts' expectations by 0.6%. Aside from that, it was a mixed quarter as it also logged a decent beat of analysts' EBITDA estimates but full-year EPS guidance meeting analysts' expectations. The stock is up 4.6% since reporting and currently trades at $143.44. Read our full, actionable report on ITT here, it's free. Founded in 1926, Graco (NYSE:GGG) is an industrial company specializing in the development and manufacturing of fluid-handling systems and products. Graco reported revenues of $528.3 million, up 7.3% year on year. This result met analysts' expectations. Taking a step back, it was a satisfactory quarter as it also recorded a decent beat of analysts' EPS estimates but a miss of analysts' Process revenue estimates. The stock is up 6.2% since reporting and currently trades at $83.76. Read our full, actionable report on Graco here, it's free. In response to the Fed's rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed's 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump's presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025. Want to invest in winners with rock-solid fundamentals? Check out our Top 6 Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate. Join Paid Stock Investor Research Help us make StockStory more helpful to investors like yourself. Join our paid user research session and receive a $50 Amazon gift card for your opinions. Sign up here. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Business Wire
08-05-2025
- Business
- Business Wire
The Power of Purpose: Flowserve Releases 2024 ESG Report
DALLAS--(BUSINESS WIRE)--Flowserve Corporation (NYSE: FLS), a leading provider of flow control products and services for the global infrastructure markets, has released its 2024 ESG Report highlighting The Power of Purpose. The report shares how Flowserve's operational framework, the Flowserve Business System, is enabling progress in its ESG focus areas of Climate, Culture and Core Responsibility, while working in tandem with its 3D growth strategy to help achieve the enterprise and sustainability goals of its customers. The report also spotlights how Flowserve's purpose comes to life through the power of its product and manufacturing innovations, its people and its global community impact program. The Flowserve Business System is enabling Flowserve's progress in its ESG focus areas of Climate, Culture and Core Responsibility, while working in tandem with its 3D strategy. 'With our decarbonization, diversification and digitization bookings growing in 2024, our 3D growth strategy has proven to be the right approach to deliver results,' said Flowserve President and Chief Executive Officer Scott Rowe. 'As we continue to put the Flowserve Business System into action, we're energized by the opportunity to create long-term, sustainable value for our customers, associates, shareholders and the world at large.' The report is accessible on the company's website at The Power of Purpose. For more information on Flowserve's ESG activities, visit the ESG page on About Flowserve: Flowserve Corp. is one of the world's leading providers of fluid motion and control products and services. Operating in more than 50 countries, the company produces engineered and industrial pumps, seals and valves as well as a range of related flow management services. More information about Flowserve can be obtained by visiting the company's Web site at Safe Harbor Statement: This news release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended. Words or phrases such as, "may," "should," "expects," "could," "intends," "plans," "anticipates," "estimates," "believes," "forecasts," "predicts" or other similar expressions are intended to identify forward-looking statements, which include, without limitation, earnings forecasts, statements relating to our business strategy and statements of expectations, beliefs, future plans and strategies and anticipated developments concerning our industry, business, operations and financial performance and condition. The forward-looking statements included in this news release are based on our current expectations, projections, estimates and assumptions. These statements are only predictions, not guarantees. Such forward-looking statements are subject to numerous risks and uncertainties that are difficult to predict. These risks and uncertainties may cause actual results to differ materially from what is forecast in such forward-looking statements, and include, without limitation, the following: global supply chain disruptions and the current inflationary environment could adversely affect the efficiency of our manufacturing and increase the cost of providing our products to customers; a portion of our bookings may not lead to completed sales, and our ability to convert bookings into revenues at acceptable profit margins; changes in global economic conditions and the potential for unexpected cancellations or delays of customer orders in our reported backlog; our dependence on our customers' ability to make required capital investment and maintenance expenditures; if we are not able to successfully execute and realize the expected financial benefits from any restructuring and realignment initiatives, our business could be adversely affected; the substantial dependence of our sales on the success of the energy, chemical, power generation and general industries; the adverse impact of volatile raw materials prices on our products and operating margins; economic, political and other risks associated with our international operations, including military actions, trade embargoes, epidemics or pandemics and changes to tariffs or trade agreements that could affect customer markets, particularly North African, Latin American, Asian and Middle Eastern markets and global oil and gas producers, and non-compliance with U.S. export/re-export control, foreign corrupt practice laws, economic sanctions and import laws and regulations; the impact of public health emergencies, such as outbreaks of epidemics, pandemics, and contagious diseases, on our business and operations; increased aging and slower collection of receivables, particularly in Latin America and other emerging markets; potential adverse effects resulting from the implementation of new tariffs and related retaliatory actions and changes to or uncertainties related to tariffs and trade agreements; our exposure to fluctuations in foreign currency exchange rates, including in hyperinflationary countries such as Argentina; potential adverse consequences resulting from litigation to which we are a party, such as litigation involving asbestos-containing material claims; expectations regarding acquisitions and the integration of acquired businesses; the potential adverse impact of an impairment in the carrying value of goodwill or other intangible assets; our dependence upon third-party suppliers whose failure to perform timely could adversely affect our business operations; the highly competitive nature of the markets in which we operate; if we are not able to maintain our competitive position by successfully developing and introducing new products and integrate new technologies, including artificial intelligence and machine learning; environmental compliance costs and liabilities; potential work stoppages and other labor matters; access to public and private sources of debt financing; our inability to protect our intellectual property in the United States, as well as in foreign countries; obligations under our defined benefit pension plans; our internal control over financial reporting may not prevent or detect misstatements because of its inherent limitations, including the possibility of human error, the circumvention or overriding of controls, or fraud; the recording of increased deferred tax asset valuation allowances in the future or the impact of tax law changes on such deferred tax assets could affect our operating results; our information technology infrastructure could be subject to service interruptions, data corruption, cyber-based attacks or network security breaches, which could disrupt our business operations and result in the loss of critical and confidential information; ineffective internal controls could impact the accuracy and timely reporting of our business and financial results; and other factors described from time to time in our filings with the Securities and Exchange Commission. All forward-looking statements included in this news release are based on information available to us on the date hereof, and we assume no obligation to update any forward-looking statement.
Yahoo
30-04-2025
- Business
- Yahoo
Flowserve (NYSE:FLS) Reports Bullish Q1, Stock Soars
Flow control equipment manufacturer Flowserve (NYSE:FLS) announced better-than-expected revenue in Q1 CY2025, with sales up 5.2% year on year to $1.14 billion. Its non-GAAP profit of $0.72 per share was 19.6% above analysts' consensus estimates. Is now the time to buy Flowserve? Find out in our full research report. Revenue: $1.14 billion vs analyst estimates of $1.1 billion (5.2% year-on-year growth, 3.6% beat) Adjusted EPS: $0.72 vs analyst estimates of $0.60 (19.6% beat) Management reiterated its full-year Adjusted EPS guidance of $3.20 at the midpoint Operating Margin: 11.5%, up from 10.4% in the same quarter last year Free Cash Flow was -$49.93 million, down from $48.65 million in the same quarter last year Backlog: $2.9 billion at quarter end, up 10.9% year on year Market Capitalization: $5.88 billion 'Our first quarter results were a strong start to the year, with robust bookings growth, margin expansion, and earnings acceleration all driven by healthy end markets and improved execution. These results demonstrate the strength of our diversified portfolio and the exceptional performance of our associates around the world operating under the Flowserve Business System,' said Scott Rowe, Flowserve's President and Chief Executive Officer. Manufacturing the largest pump ever built for nuclear power generation, Flowserve (NYSE:FLS) manufactures and sells flow control equipment for various industries. Gas and liquid handling companies possess the technical know-how and specialized equipment to handle valuable (and sometimes dangerous) substances. Lately, water conservation and carbon capture–which requires hydrogen and other gasses as well as specialized infrastructure–have been trending up, creating new demand for products such as filters, pumps, and valves. On the other hand, gas and liquid handling companies are at the whim of economic cycles. Consumer spending and interest rates, for example, can greatly impact the industrial production that drives demand for these companies' offerings. Examining a company's long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Regrettably, Flowserve's sales grew at a sluggish 3.2% compounded annual growth rate over the last five years. This fell short of our benchmark for the industrials sector and is a poor baseline for our analysis. We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. Flowserve's annualized revenue growth of 10.6% over the last two years is above its five-year trend, suggesting its demand recently accelerated. We can dig further into the company's revenue dynamics by analyzing its backlog, or the value of its outstanding orders that have not yet been executed or delivered. Flowserve's backlog reached $2.9 billion in the latest quarter and averaged 3.6% year-on-year growth over the last two years. Because this number is lower than its revenue growth, we can see the company fulfilled orders at a faster rate than it added new orders to the backlog. This implies Flowserve was operating efficiently but raises questions about the health of its sales pipeline. This quarter, Flowserve reported year-on-year revenue growth of 5.2%, and its $1.14 billion of revenue exceeded Wall Street's estimates by 3.6%. Looking ahead, sell-side analysts expect revenue to grow 4.7% over the next 12 months, a deceleration versus the last two years. This projection is underwhelming and indicates its products and services will see some demand headwinds. Here at StockStory, we certainly understand the potential of thematic investing. Diverse winners from Microsoft (MSFT) to Alphabet (GOOG), Coca-Cola (KO) to Monster Beverage (MNST) could all have been identified as promising growth stories with a megatrend driving the growth. So, in that spirit, we've identified a relatively under-the-radar profitable growth stock benefiting from the rise of AI, available to you FREE via this link. Operating margin is a key measure of profitability. Think of it as net income - the bottom line - excluding the impact of taxes and interest on debt, which are less connected to business fundamentals. Flowserve has done a decent job managing its cost base over the last five years. The company has produced an average operating margin of 8.1%, higher than the broader industrials sector. Looking at the trend in its profitability, Flowserve's operating margin rose by 2.8 percentage points over the last five years, as its sales growth gave it operating leverage. In Q1, Flowserve generated an operating profit margin of 11.5%, up 1.1 percentage points year on year. The increase was encouraging, and because its operating margin rose more than its gross margin, we can infer it was more efficient with expenses such as marketing, R&D, and administrative overhead. Revenue trends explain a company's historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions. Flowserve's EPS grew at an unimpressive 7.4% compounded annual growth rate over the last five years. On the bright side, this performance was better than its 3.2% annualized revenue growth and tells us the company became more profitable on a per-share basis as it expanded. Diving into the nuances of Flowserve's earnings can give us a better understanding of its performance. As we mentioned earlier, Flowserve's operating margin expanded by 2.8 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its higher earnings; taxes and interest expenses can also affect EPS but don't tell us as much about a company's fundamentals. Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business. For Flowserve, its two-year annual EPS growth of 39.4% was higher than its five-year trend. This acceleration made it one of the faster-growing industrials companies in recent history. In Q1, Flowserve reported EPS at $0.72, up from $0.58 in the same quarter last year. This print easily cleared analysts' estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Flowserve's full-year EPS of $2.77 to grow 16.5%. We were impressed by how significantly Flowserve blew past analysts' revenue expectations this quarter. We were also glad its EPS outperformed Wall Street's estimates. Zooming out, we think this was a good quarter with some key areas of upside. The stock traded up 7.4% to $48.19 immediately after reporting. Flowserve put up rock-solid earnings, but one quarter doesn't necessarily make the stock a buy. Let's see if this is a good investment. When making that decision, it's important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it's free.
