Core Viewpoint - Flowserve (FLS) reported quarterly earnings of $0.91 per share, exceeding the Zacks Consensus Estimate of $0.78 per share, and up from $0.73 per share a year ago [1][2] Earnings Performance - The earnings surprise for the quarter was +16.67%, following a previous quarter surprise of +22.03% [2] - Over the last four quarters, Flowserve has surpassed consensus EPS estimates two times [2] Revenue Analysis - Flowserve posted revenues of $1.19 billion for the quarter, missing the Zacks Consensus Estimate by 1.98%, but up from $1.16 billion year-over-year [3] - The company has topped consensus revenue estimates two times over the last four quarters [3] Stock Performance - Flowserve shares have declined approximately 4.6% since the beginning of the year, contrasting with the S&P 500's gain of 8.6% [4] Future Outlook - The company's earnings outlook is crucial for investors, with current consensus EPS estimates at $0.77 for the coming quarter and $3.21 for the current fiscal year [5][8] - The Zacks Rank for Flowserve is currently 1 (Strong Buy), indicating expectations for the stock to outperform the market in the near future [7] Industry Context - The Manufacturing - General Industrial industry, to which Flowserve belongs, is currently in the top 11% of over 250 Zacks industries, suggesting a favorable industry outlook [9]

[Second Quarter 2025 Results Overview](index=1&type=section&id=Second%20Quarter%202025%20Results%20Overview) Flowserve achieved sales and earnings growth, expanded margins, and raised full-year adjusted EPS guidance, driven by strategic execution and solid financial performance [Management Commentary](index=1&type=section&id=Management%20Commentary) Flowserve's CEO, Scott Rowe, highlighted the successful execution of the 3D strategy and Flowserve Business System, leading to sales and earnings growth, margin expansion, and an increased full-year adjusted EPS guidance - Successful ongoing execution of the 3D strategy and the Flowserve Business System, driving sales and earnings growth while expanding margins[3](index=3&type=chunk) - Increased full-year 2025 Adjusted EPS guidance from **$3.10-$3.30** to **$3.25-$3.40**, representing an increase of more than **25%** at the midpoint versus last year[4](index=4&type=chunk) [Key Financial Highlights](index=1&type=section&id=Key%20Financial%20Highlights) The second quarter saw solid bookings, robust gross and adjusted gross margins, expanded operating and adjusted operating margins, and strong cash from operations, contributing to increased reported and adjusted earnings per share - Solid bookings of **$1.1 billion**, including **$621 million** of durable aftermarket bookings[4](index=4&type=chunk) Q2 2025 Key Financial Highlights | Metric | Value | Change vs. Prior Year | | :--- | :--- | :--- | | Gross Margin | 34.2% | +260 bps | | Adjusted Gross Margin | 34.9% | +260 bps | | Operating Margin | 12.3% | +180 bps | | Adjusted Operating Margin | 14.6% | +210 bps | | Reported EPS | $0.62 | +12.7% | | Adjusted EPS | $0.91 | +24.7% | | Cash From Operations | $154 million | Significant increase | [Merger with Chart Industries, Inc. Termination](index=2&type=section&id=Merger%20with%20Chart%20Industries%2C%20Inc.%20Termination) Flowserve terminated its previously announced merger agreement with Chart Industries, Inc. after Chart's board determined an unsolicited proposal from Baker Hughes constituted a 'superior proposal', with Flowserve receiving a $266 million termination payment - Flowserve terminated its merger agreement with Chart Industries, Inc[5](index=5&type=chunk) - The termination followed Chart's Board of Directors determining a proposal from Baker Hughes was a 'superior proposal'[5](index=5&type=chunk) - Flowserve will receive a **$266 million** termination payment[5](index=5&type=chunk) [Key Financial Figures & 2025 Guidance](index=2&type=section&id=Key%20Financial%20Figures%20%26%202025%20Guidance) Flowserve reported increased backlog, sales growth, and expanded operating margins for Q2 and YTD 2025, leading to an upward revision of its full-year Adjusted EPS guidance [Key Financial Figures (Q2 & YTD 2025 vs 2024)](index=2&type=section&id=Key%20Financial%20Figures%20%28Q2%20%26%20YTD%202025%20vs%202024%29) Flowserve reported a **6.3%** increase in backlog for both Q2 and YTD 2025. While Q2 bookings decreased by **13.8%**, YTD bookings saw a slight increase of **0.7%**. Sales grew by **2.7%** in Q2 and **3.9%** YTD. Both reported and adjusted operating margins expanded, and adjusted EPS showed strong growth of **24.7%** in Q2 and **24.4%** YTD Key Financial Figures (Q2 & YTD 2025 vs 2024) | Metric | Q2 2025 | Q2 2024 | Q2 Change | YTD 2025 | YTD 2024 | YTD Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Backlog | $2,853.2M | $2,684.4M | 6.3% | $2,853.2M | $2,684.4M | 6.3% | | Bookings | $1,073.9M | $1,246.1M | (13.8%) | $2,299.4M | $2,283.8M | 0.7% | | Sales | $1,188.1M | $1,156.9M | 2.7% | $2,332.6M | $2,244.4M | 3.9% | | Operating Margin | 12.3% | 10.5% | 180 bps | 11.9% | 10.4% | 150 bps | | Adjusted Operating Margin | 14.6% | 12.5% | 210 bps | 13.8% | 11.7% | 210 bps | | Earnings Per Share | $0.62 | $0.55 | 12.7% | $1.18 | $1.11 | 6.3% | | Adjusted Earnings Per Share | $0.91 | $0.73 | 24.7% | $1.63 | $1.31 | 24.4% | | Cash From Operations | $154.1M | ($12.8M) | $166.9M | $104.2M | $49.5M | $54.7M | [2025 Guidance Update](index=2&type=section&id=2025%20Guidance%20Update) Flowserve updated its full-year 2025 guidance, increasing the Adjusted EPS target range and slightly narrowing the organic sales growth forecast, with the impact from acquisitions now expected to be lower and foreign exchange translation projected to be neutral - The Company updated its full-year 2025 guidance, including increasing its Adjusted EPS target range[7](index=7&type=chunk) Full-Year 2025 Guidance Comparison | Metric | Prior Range | Current Range | | :--- | :--- | :--- | | Organic sales growth | +3% to +5% | +3% to +4% | | Impact from acquisitions | Approx. +300 bps | Approx. +200 bps | | Impact from foreign exchange translation | Approx. (100) to 0 bps | Approx. 0 bps | | Total sales growth | +5% to +7% | +5% to +6% | | Adjusted EPS | $3.10 to $3.30 | $3.25 to $3.40 | | Net interest expense | Approx. $70 million | Approx. $70 million | | Adjusted tax rate | Approx. 21% | Approx. 20% | | Capital expenditures | $80 to $90 million | $80 to $90 million | [Consolidated Financial Statements (Unaudited)](index=4&type=section&id=Consolidated%20Financial%20Statements%20%28Unaudited%29) The unaudited consolidated financial statements for Q2 and YTD 2025 show increased sales, gross profit, operating income, and net earnings, alongside growth in total assets and equity [Condensed Consolidated Statements of Income (Three Months Ended June 30)](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income%20%28Three%20Months%20Ended%20June%2030%29) For Q2 2025, Flowserve reported a **2.7%** increase in sales to **$1,188.1 million**, with gross profit rising by **11.1%** to **$406.6 million**, operating income grew by **20.8%** to **$146.6 million**, and net earnings attributable to Flowserve Corporation increased by **12.6%** to **$81.8 million**, resulting in a diluted EPS of **$0.62** Q2 Consolidated Statements of Income (Amounts in thousands) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Sales | $1,188,092 | $1,156,892 | | Cost of sales | $(781,510) | $(790,796) | | Gross profit | $406,582 | $366,096 | | Operating income | $146,590 | $121,304 | | Earnings before income taxes | $103,860 | $100,298 | | Net earnings attributable to Flowserve Corporation | $81,754 | $72,616 | | Diluted EPS | $0.62 | $0.55 | [Condensed Consolidated Statements of Income (Six Months Ended June 30)](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income%20%28Six%20Months%20Ended%20June%2030%29) For the first six months of 2025, sales increased by **3.9%** to **$2,332.6 million**, with gross profit growing by **10.0%** to **$775.9 million**, operating income rose by **18.8%** to **$278.5 million**, and net earnings attributable to Flowserve Corporation increased by **6.0%** to **$155.7 million**, resulting in a diluted EPS of **$1.18** YTD Consolidated Statements of Income (Amounts in thousands) | Metric | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | | Sales | $2,332,635 | $2,244,371 | | Cost of sales | $(1,556,719) | $(1,539,307) | | Gross profit | $775,916 | $705,064 | | Operating income | $278,479 | $234,382 | | Earnings before income taxes | $201,060 | $198,355 | | Net earnings attributable to Flowserve Corporation | $155,659 | $146,836 | | Diluted EPS | $1.18 | $1.11 | [Condensed Consolidated Balance Sheets](index=15&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets increased to **$5,682.5 million** from **$5,500.8 million** at year-end 2024, driven by increases in accounts receivable, contract assets, and goodwill, while total equity also grew significantly to **$2,279.0 million** from **$2,051.7 million**, primarily due to higher retained earnings and a reduction in accumulated other comprehensive loss Consolidated Balance Sheets (Amounts in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total current assets | $3,004,028 | $2,904,497 | | Property, plant and equipment, net | $558,345 | $539,703 | | Goodwill | $1,337,747 | $1,286,295 | | Total assets | $5,682,525 | $5,500,821 | | Total current liabilities | $1,430,382 | $1,468,084 | | Long-term debt due after one year | $1,440,676 | $1,460,132 | | Total equity | $2,279,002 | $2,051,712 | [Condensed Consolidated Statements of Cash Flows](index=16&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash provided by operating activities more than doubled to **$104.2 million** from **$49.5 million** in the prior year, while net cash used in financing activities significantly increased to **$154.4 million**, primarily due to higher share repurchases and a contingent consideration payment related to an acquired business YTD Consolidated Statements of Cash Flows (Amounts in thousands) | Metric | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | | Net cash flows provided by operating activities | $104,212 | $49,475 | | Net cash flows (used) by investing activities | $(27,473) | $(30,090) | | Net cash flows (used) by financing activities | $(154,444) | $(36,683) | | Net change in cash and cash equivalents | $(46,238) | $(30,595) | | Cash and cash equivalents at end of period | $629,203 | $515,083 | [Consolidated Non-GAAP Financial Measures Reconciliation (Unaudited)](index=5&type=section&id=Consolidated%20Non-GAAP%20Financial%20Measures%20Reconciliation%20%28Unaudited%29) This section reconciles reported GAAP figures with non-GAAP measures for Q2 and YTD 2025 and 2024, highlighting adjustments for merger costs, realignment charges, and foreign exchange impacts to provide a clearer view of underlying performance [Three Months Ended June 30, 2025 Reconciliation](index=5&type=section&id=Three%20Months%20Ended%20June%2030%2C%202025%20Reconciliation) For Q2 2025, adjusted gross profit margin was **34.9%** (vs. 34.2% reported) and adjusted operating margin was **14.6%** (vs. 12.3% reported), with adjusted diluted EPS reaching **$0.91** (vs. $0.62 reported), and key adjustments including merger transaction costs and below-the-line foreign exchange impacts Q2 2025 Consolidated Non-GAAP Reconciliation (Amounts in thousands) | Metric | Reported | Adjusted | | :--- | :--- | :--- | | Gross Profit | $406,582 | $415,124 | | Gross as % of sales | 34.2% | 34.9% | | Operating Income | $146,590 | $173,732 | | Operating as % of sales | 12.3% | 14.6% | | Net Earnings | $81,754 | $119,976 | | Diluted EPS | $0.62 | $0.91 | - Key adjustments included **$15.5 million** for merger transaction costs and **$20.0 million** for below-the-line foreign exchange impacts[12](index=12&type=chunk)[14](index=14&type=chunk)[15](index=15&type=chunk) [Three Months Ended June 30, 2024 Reconciliation](index=6&type=section&id=Three%20Months%20Ended%20June%2030%2C%202024%20Reconciliation) For Q2 2024, adjusted gross profit margin was **32.3%** (vs. 31.6% reported) and adjusted operating margin was **12.5%** (vs. 10.5% reported), with adjusted diluted EPS at **$0.73** (vs. $0.55 reported), and significant adjustments for realignment charges and discrete asset write-downs Q2 2024 Consolidated Non-GAAP Reconciliation (Amounts in thousands) | Metric | Reported | Adjusted | | :--- | :--- | :--- | | Gross Profit | $366,096 | $373,617 | | Gross as % of sales | 31.6% | 32.3% | | Operating Income | $121,304 | $144,434 | | Operating as % of sales | 10.5% | 12.5% | | Net Earnings | $72,616 | $96,332 | | Diluted EPS | $0.55 | $0.73 | - Significant adjustments included **$20.2 million** for realignment charges and **$4.0 million** for discrete asset write-downs[16](index=16&type=chunk)[17](index=17&type=chunk) [Six Months Ended June 30, 2025 Reconciliation](index=10&type=section&id=Six%20Months%20Ended%20June%2030%2C%202025%20Reconciliation) For YTD 2025, adjusted gross profit margin was **34.2%** (vs. 33.3% reported) and adjusted operating margin was **13.8%** (vs. 11.9% reported), with adjusted diluted EPS reaching **$1.63** (vs. $1.18 reported), and major adjustments for merger transaction costs and below-the-line foreign exchange impacts YTD 2025 Consolidated Non-GAAP Reconciliation (Amounts in thousands) | Metric | Reported | Adjusted | | :--- | :--- | :--- | | Gross Profit | $775,916 | $797,981 | | Gross as % of sales | 33.3% | 34.2% | | Operating Income | $278,479 | $320,804 | | Operating as % of sales | 11.9% | 13.8% | | Net Earnings | $155,659 | $215,509 | | Diluted EPS | $1.18 | $1.63 | - Major adjustments included **$15.5 million** for merger transaction costs and **$31.4 million** for below-the-line foreign exchange impacts[27](index=27&type=chunk)[28](index=28&type=chunk) [Six Months Ended June 30, 2024 Reconciliation](index=10&type=section&id=Six%20Months%20Ended%20June%2030%2C%202024%20Reconciliation) For YTD 2024, adjusted gross profit margin was **32.0%** (vs. 31.4% reported) and adjusted operating margin was **11.7%** (vs. 10.4% reported), with adjusted diluted EPS at **$1.31** (vs. $1.11 reported), and significant adjustments for realignment charges and discrete asset write-downs YTD 2024 Consolidated Non-GAAP Reconciliation (Amounts in thousands) | Metric | Reported | Adjusted | | :--- | :--- | :--- | | Gross Profit | $705,064 | $718,258 | | Gross as % of sales | 31.4% | 32.0% | | Operating Income | $234,382 | $262,679 | | Operating as % of sales | 10.4% | 11.7% | | Net Earnings | $146,836 | $173,724 | | Diluted EPS | $1.11 | $1.31 | - Significant adjustments included **$27.4 million** for realignment charges and **$4.0 million** for discrete asset write-downs[29](index=29&type=chunk)[31](index=31&type=chunk) [Segment Information (Unaudited)](index=6&type=section&id=Segment%20Information%20%28Unaudited%29) This section details the Q2 and YTD 2025 performance of the Flowserve Pumps Division (FPD) and Flow Control Division (FCD), including bookings, sales, and margin analysis [Flowserve Pumps Division (FPD)](index=6&type=section&id=Flowserve%20Pumps%20Division%20%28FPD%29) The Flowserve Pumps Division demonstrated strong margin expansion and operating income growth in Q2 and YTD 2025, despite a decrease in Q2 bookings [FPD Q2 Reported Performance](index=6&type=section&id=FPD%20Q2%20Reported%20Performance) In Q2 2025, Flowserve Pumps Division's sales increased slightly by **0.8%** to **$818.9 million**, despite a **19.5%** decrease in bookings, while the division significantly improved its gross profit margin by **450 basis points** to **36.5%** and saw a **24.2%** rise in segment operating income to **$162.7 million**, with operating margin expanding to **19.9%** FPD Q2 Reported Performance (Amounts in millions) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Bookings | $723.8 | $898.8 | (19.5%) | | Sales | $818.9 | $812.2 | 0.8% | | Gross profit margin | 36.5% | 32.0% | 450 bps | | Segment operating income | $162.7 | $131.0 | 24.2% | | Segment operating income as a percentage of sales | 19.9% | 16.1% | 380 bps | [FPD Q2 Non-GAAP Reconciliation](index=7&type=section&id=FPD%20Q2%20Non-GAAP%20Reconciliation) For Q2 2025, FPD's adjusted gross profit margin was **36.8%** (vs. 36.5% reported) and adjusted operating margin was **20.3%** (vs. 19.9% reported), reflecting adjustments primarily for realignment charges and discrete items FPD Q2 Non-GAAP Reconciliation (Amounts in thousands) | Metric | Reported (Q2 2025) | Adjusted (Q2 2025) | | :--- | :--- | :--- | | Gross Profit | $299,229 | $301,152 | | Gross as % of sales | 36.5% | 36.8% | | Operating Income | $162,745 | $166,516 | | Operating as % of sales | 19.9% | 20.3% | [FPD YTD Reported Performance](index=11&type=section&id=FPD%20YTD%20Reported%20Performance) For the first six months of 2025, FPD's sales increased by **1.3%** to **$1,602.1 million**, with bookings decreasing slightly by **1.6%**, while gross profit margin improved by **330 basis points** to **35.4%**, and segment operating income grew by **23.7%** to **$299.3 million**, with operating margin reaching **18.7%** FPD YTD Reported Performance (Amounts in millions) | Metric | YTD 2025 | YTD 2024 | Change | | :--- | :--- | :--- | :--- | | Bookings | $1,576.1 | $1,602.2 | (1.6%) | | Sales | $1,602.1 | $1,581.6 | 1.3% | | Gross profit margin | 35.4% | 32.1% | 330 bps | | Segment operating income | $299.3 | $241.9 | 23.7% | | Segment operating income as a percentage of sales | 18.7% | 15.3% | 340 bps | [FPD YTD Non-GAAP Reconciliation](index=12&type=section&id=FPD%20YTD%20Non-GAAP%20Reconciliation) For YTD 2025, FPD's adjusted gross profit margin was **35.7%** (vs. 35.4% reported) and adjusted operating margin was **19.0%** (vs. 18.7% reported), after accounting for realignment charges and discrete items FPD YTD Non-GAAP Reconciliation (Amounts in thousands) | Metric | Reported (YTD 2025) | Adjusted (YTD 2025) | | :--- | :--- | :--- | | Gross Profit | $567,691 | $572,621 | | Gross as % of sales | 35.4% | 35.7% | | Operating Income | $299,259 | $305,164 | | Operating as % of sales | 18.7% | 19.0% | [Flow Control Division (FCD)](index=7&type=section&id=Flow%20Control%20Division%20%28FCD%29) The Flow Control Division achieved sales and operating income growth in Q2 and YTD 2025, though gross profit margins saw a slight decline in both periods [FCD Q2 Reported Performance](index=7&type=section&id=FCD%20Q2%20Reported%20Performance) In Q2 2025, Flow Control Division's sales increased by **6.8%** to **$371.5 million**, and bookings rose by **1.6%** to **$354.7 million**, while gross profit margin decreased by **160 basis points** to **29.0%**, but segment operating income grew by **17.1%** to **$37.8 million**, with operating margin at **10.2%** FCD Q2 Reported Performance (Amounts in millions) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Bookings | $354.7 | $349.2 | 1.6% | | Sales | $371.5 | $347.7 | 6.8% | | Gross profit margin | 29.0% | 30.6% | (160) bps | | Segment operating income | $37.8 | $32.3 | 17.1% | | Segment operating income as a percentage of sales | 10.2% | 9.3% | 90 bps | [FCD Q2 Non-GAAP Reconciliation](index=8&type=section&id=FCD%20Q2%20Non-GAAP%20Reconciliation) For Q2 2025, FCD's adjusted gross profit margin was **30.8%** (vs. 29.0% reported) and adjusted operating margin was **12.2%** (vs. 10.2% reported), with adjustments including realignment charges, acquisition-related costs, purchase accounting step-up, and discrete items FCD Q2 Non-GAAP Reconciliation (Amounts in thousands) | Metric | Reported (Q2 2025) | Adjusted (Q2 2025) | | :--- | :--- | :--- | | Gross Profit | $107,694 | $114,310 | | Gross as % of sales | 29.0% | 30.8% | | Operating Income | $37,771 | $45,472 | | Operating as % of sales | 10.2% | 12.2% | - Adjustments include **$3.9 million** for acquisition-related costs and **$3.9 million** for purchase accounting step-up and intangible asset amortization[21](index=21&type=chunk)[24](index=24&type=chunk) [FCD YTD Reported Performance](index=11&type=section&id=FCD%20YTD%20Reported%20Performance) For the first six months of 2025, FCD's sales increased by **10.1%** to **$735.6 million**, and bookings grew by **5.9%** to **$730.4 million**, while gross profit margin decreased by **150 basis points** to **28.3%**, and segment operating income rose by **3.4%** to **$69.3 million**, with operating margin at **9.4%** FCD YTD Reported Performance (Amounts in millions) | Metric | YTD 2025 | YTD 2024 | Change | | :--- | :--- | :--- | :--- | | Bookings | $730.4 | $689.9 | 5.9% | | Sales | $735.6 | $668.2 | 10.1% | | Gross profit margin | 28.3% | 29.8% | (150) bps | | Segment operating income | $69.3 | $67.0 | 3.4% | | Segment operating income as a percentage of sales | 9.4% | 10.0% | (60) bps | [FCD YTD Non-GAAP Reconciliation](index=12&type=section&id=FCD%20YTD%20Non-GAAP%20Reconciliation) For YTD 2025, FCD's adjusted gross profit margin was **30.6%** (vs. 28.3% reported) and adjusted operating margin was **12.2%** (vs. 9.4% reported), with adjustments including realignment charges, acquisition-related costs, purchase accounting step-up, and discrete items FCD YTD Non-GAAP Reconciliation (Amounts in thousands) | Metric | Reported (YTD 2025) | Adjusted (YTD 2025) | | :--- | :--- | :--- | | Gross Profit | $207,881 | $225,078 | | Gross as % of sales | 28.3% | 30.6% | | Operating Income | $69,254 | $90,060 | | Operating as % of sales | 9.4% | 12.2% | - Adjustments include **$5.2 million** for acquisition-related costs and **$8.7 million** for purchase accounting step-up and intangible asset amortization[33](index=33&type=chunk)[34](index=34&type=chunk) [Second Quarter and Year-to-Date 2025—Segment Results Summary](index=14&type=section&id=Second%20Quarter%20and%20Year-to-Date%202025%E2%80%94Segment%20Results%20Summary) The Flowserve Pumps Division (FPD) showed strong margin expansion in Q2 and YTD 2025, despite a decrease in Q2 bookings, while the Flow Control Division (FCD) experienced sales growth in both periods but saw a decline in gross and adjusted operating margins in Q2, though YTD adjusted operating margin remained stable Segment Results Summary (Q2 & YTD 2025 vs 2024, Amounts in millions) | Metric | FPD Q2 2025 | FPD Q2 Change | FPD YTD 2025 | FPD YTD Change | FCD Q2 2025 | FCD Q2 Change | FCD YTD 2025 | FCD YTD Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Bookings | $723.8 | -19.5% | $1,576.1 | -1.6% | $354.7 | 1.6% | $730.4 | 5.9% | | Sales | $818.9 | 0.8% | $1,602.1 | 1.3% | $371.5 | 6.8% | $735.6 | 10.1% | | Gross Margin (% of sales) | 36.5% | 450 bps | 35.4% | 330 bps | 29.0% | (160) bps | 28.3% | (150) bps | | Operating Income | $162.7 | 24.2% | $299.3 | 23.7% | $37.8 | 17.1% | $69.3 | 3.4% | | Operating Margin (% of sales) | 19.9% | 380 bps | 18.7% | 340 bps | 10.2% | 90 bps | 9.4% | (60) bps | | Adjusted Operating Income | $166.5 | 21.0% | $305.2 | 20.8% | $45.5 | -2.2% | $90.1 | 9.7% | | Adj. Oper. Margin (% of sales) | 20.3% | 340 bps | 19.0% | 300 bps | 12.2% | (120) bps | 12.2% | (10) bps | [Additional Information](index=3&type=section&id=Additional%20Information) This section provides details on the upcoming conference call, an overview of Flowserve Corporation, contact information, a safe harbor statement, and an explanation of non-GAAP financial measures [Webcast and Conference Call Instructions](index=3&type=section&id=Webcast%20and%20Conference%20Call%20Instructions) Flowserve will host a conference call on Wednesday, July 30, at 11:00 a.m. Eastern Time to discuss its second quarter results, with access available on the company's Investors page - Conference call to discuss Q2 results on Wednesday, July 30, at 11:00 a.m. Eastern Time[9](index=9&type=chunk) - Accessible by shareholders and interested parties on Flowserve's Investors page[9](index=9&type=chunk) [About Flowserve](index=17&type=section&id=About%20Flowserve) Flowserve Corporation is a global leader in fluid motion and control products and services, operating in over 50 countries and providing engineered and industrial pumps, seals, valves, and related flow management services - Flowserve Corporation is one of the world's leading providers of fluid motion and control products and services[39](index=39&type=chunk) - Operates in more than **50 countries**[39](index=39&type=chunk) - Produces engineered and industrial pumps, seals and valves as well as a range of related flow management services[39](index=39&type=chunk) [Flowserve Contacts](index=17&type=section&id=Flowserve%20Contacts) Contact information is provided for Investor Relations, including Brian Ezzell and Tarek Zeni, and for Media inquiries, David Mason - Investor Contacts: Brian Ezzell, Vice President, Investor Relations, Treasurer & Corporate Finance (469) 420-3222; Tarek Zeni, Director, Investor Relations (469) 420-4045[40](index=40&type=chunk) - Media Contact: David Mason, Senior Director, Communications (214) 500-9687[40](index=40&type=chunk) [Safe Harbor Statement](index=17&type=section&id=Safe%20Harbor%20Statement) The news release contains forward-looking statements that are predictions, not guarantees, and are subject to numerous difficult-to-predict risks and uncertainties, including global supply chain disruptions, inflationary pressures, potential order cancellations, dependence on customer investments, volatile raw material prices, and various economic, political, and operational challenges associated with international business - Forward-looking statements are based on current expectations, projections, estimates, and assumptions, but are 'only predictions, not guarantees' and 'subject to numerous risks and uncertainties'[40](index=40&type=chunk)[42](index=42&type=chunk) - Key risks include global supply chain disruptions, inflationary environment, potential for unexpected cancellations or delays of customer orders, dependence on customer capital investment, volatile raw materials prices, and economic, political, and other risks associated with international operations[42](index=42&type=chunk) - Other risks include public health emergencies, increased aging and slower collection of receivables, tariffs, foreign currency fluctuations, litigation (e.g., asbestos claims), acquisitions, goodwill impairment, dependence on third-party suppliers, competition, new product development, environmental compliance, labor matters, debt financing access, intellectual property protection, pension plans, internal control limitations, deferred tax asset valuation, and IT infrastructure security[42](index=42&type=chunk) [Non-GAAP Financial Measures Explanation](index=18&type=section&id=Non-GAAP%20Financial%20Measures%20Explanation) Flowserve uses non-GAAP financial measures to provide additional useful comparisons and a clearer view of underlying business trends by excluding certain non-recurring items, which are utilized for internal decision-making and performance evaluation but are not a substitute for GAAP results - Non-GAAP financial measures are used to present additional useful comparisons and provide a clearer view of underlying business trends by excluding certain non-recurring items[44](index=44&type=chunk) - Management uses these non-GAAP measures for financial, operating, planning, compensation decisions, and performance evaluation[44](index=44&type=chunk) - Non-GAAP financial measures should be viewed in addition to, and not as a substitute for, the Company's reported results prepared in accordance with GAAP[44](index=44&type=chunk)

Market Overview - Wall Street's winning streak continues, driven by positive trade news and strong economic data, with the S&P 500 reaching a record high following a significant trade deal between the United States and Japan, which lowers tariffs and opens up $550 billion in new investments [1] - Retail sales exceeded expectations in June, and jobless claims decreased, indicating a robust labor market and steady consumer spending despite ongoing tariff concerns [1][9] Trade Negotiations and Economic Environment - Progress in trade negotiations with the U.K., Indonesia, and the Philippines, along with positive signals from China and the EU, creates an encouraging backdrop for equities [2] - The current earnings season is contributing to market momentum, suggesting that focusing on relative price strength can help investors identify leading stocks [2] Stock Recommendations - Recommended stocks based on relative price strength include Western Digital Corporation (WDC), Flowserve Corporation (FLS), OPENLANE, Inc. (KAR), AngloGold Ashanti plc (AU), and Jabil Inc. (JBL) [3][9] - These stocks are outperforming their peers, supported by strong relative price strength metrics [9] Relative Price Strength Strategy - Earnings growth and valuation multiples are crucial for assessing a stock's potential returns and its performance relative to peers [4] - Investors are advised to avoid underperforming stocks and focus on those that are outperforming their respective industries or benchmarks [5] Screening Parameters - Stocks are screened based on relative price changes over 12 weeks, 4 weeks, and 1 week, as well as positive current-quarter estimate revisions [8] - Stocks that have shown better performance than the S&P 500 over the last 1 to 3 months and have solid fundamentals are considered for investment [6] Company Profiles - **Western Digital Corporation (WDC)**: Market cap of $23.4 billion, expected EPS growth of 2,465% year-over-year for fiscal 2025, with a trailing four-quarter earnings surprise of approximately 7.3% [11][12] - **Flowserve Corporation (FLS)**: Market cap not specified, expected EPS growth rate of 14.2% over three to five years, with a 22.1% year-over-year growth estimate for 2025 [13][14] - **OPENLANE, Inc. (KAR)**: Market cap of $2.7 billion, expected EPS growth of 17.7% year-over-year for 2025, shares up 44% in a year [14][15] - **AngloGold Ashanti plc (AU)**: Market cap of $21.8 billion, expected EPS growth of 125.8% year-over-year for 2025, shares up 89% in a year [16] - **Jabil Inc. (JBL)**: Market cap not specified, expected EPS growth rate of 16.6% over three to five years, with a 10.6% year-over-year growth estimate for 2025 [17][18]

Core Viewpoint - Flowserve (FLS) has been upgraded to a Zacks Rank 1 (Strong Buy), indicating a positive trend in earnings estimates which is a significant factor influencing stock prices [1][2]. Earnings Estimates and Stock Price Impact - The Zacks rating system is based on changes in earnings estimates, which are closely correlated with short-term stock price movements, particularly due to institutional investors adjusting their valuations based on these estimates [3][5]. - An increase in earnings estimates typically leads to higher fair value calculations for stocks, prompting institutional investors to buy or sell, thus affecting stock prices [3]. Flowserve's Earnings Outlook - For the fiscal year ending December 2025, Flowserve is expected to earn $3.20 per share, which remains unchanged from the previous year, but the Zacks Consensus Estimate has increased by 2.6% over the past three months [7]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [6]. - The upgrade of Flowserve to Zacks Rank 1 places it in the top 5% of Zacks-covered stocks, indicating strong potential for near-term price appreciation [9].

Group 1 - FLSmidth & Co. A/S initiated a share buy-back programme on 25 June 2025, with a maximum amount of DKK 1.4 billion and up to 4,600,000 shares, representing approximately 8 percent of the company's share capital [1] - The share buy-back programme is executed in accordance with EU regulations on market abuse and safe harbour [1] - As of 8 July 2025, a total of 218,000 shares have been bought back under the programme, with a total transaction value of DKK 84,480,553.18 [2][3] Group 2 - Following the transactions, FLSmidth holds 785,002 treasury shares, which is 1.36 percent of the total share capital [3] - The average transaction prices for shares bought back during the specified period ranged from DKK 381.46 to DKK 390.75 [2] - The company aims to improve sustainability in the mining industry and has set a target for zero emissions by 2030 [4]

Group 1 - FLSmidth & Co. A/S initiated a share buy-back programme on 25 June 2025, with a maximum amount of DKK 1.4 billion and up to 4,600,000 shares, representing approximately 8 percent of the company's share capital [1] - The share buy-back programme is executed in compliance with EU regulations on market abuse and safe harbour [1] - As of 1 July 2025, FLSmidth has repurchased a total of 109,500 shares under the programme, with a total transaction value of DKK 42,687,499 [2][3] Group 2 - The average transaction prices for shares repurchased ranged from DKK 382.54 to DKK 394.10 during the buy-back period [2] - Following the transactions, FLSmidth holds 676,502 shares as treasury shares, which is 1.17 percent of the total share capital [3]

Core Viewpoint - FLSmidth has agreed to divest its Air Pollution Control (APC) business to Rubicon Partners, concluding a series of divestments that began in 2020 [1][2]. Group 1: Transaction Details - The divestment includes all related assets such as intellectual property, technology, employees, and order backlog [1]. - The transaction is expected to close in the second half of 2025 [1]. - FLSmidth anticipates a small net gain from the divestment, which will be recognized under discontinued operations [2]. Group 2: Financial Guidance - The transaction does not alter FLSmidth's previously communicated financial guidance for the full year 2025 [2]. Group 3: Company Background - FLSmidth is a technology and service supplier to the global mining industry, focusing on improving performance, lowering operating costs, and reducing environmental impact [3]. - The company aims for zero emissions in mining by 2030 as part of its sustainability ambition, MissionZero [3]. Group 4: Rubicon Partners Overview - Rubicon Partners is a UK-based investment partnership that specializes in acquiring complex industrial businesses [4]. - Over 32 years, Rubicon has invested in 83 businesses, with values ranging from £15 million to £250 million [4]. - The firm focuses on long-term value creation by collaborating closely with company management [4].

Company Overview - Flowserve (FLS) shares increased by 6.8% to close at $51.88, supported by strong trading volume, contrasting with a 3.8% decline over the past four weeks [1] - The company specializes in manufacturing pumps, valves, and other components for the oil and gas industries [3] Business Performance - The recent rally in Flowserve's stock is attributed to positive momentum in its aftermarket business, driven by robust demand across North America, Europe, the Middle East, and Latin America [2] - An increase in bookings in general industries, energy, and power end markets is bolstering the company's performance [2] Earnings Expectations - Flowserve is projected to report quarterly earnings of $0.77 per share, reflecting a year-over-year increase of 5.5% [3] - Expected revenues for the upcoming quarter are $1.21 billion, which represents a 4.7% increase compared to the same quarter last year [3] Market Sentiment - The consensus EPS estimate for Flowserve has remained stable over the last 30 days, indicating that stock price movements may not sustain without changes in earnings estimate revisions [5] - Flowserve currently holds a Zacks Rank of 3 (Hold), while IHI CORP, a competitor in the same industry, has a Zacks Rank of 1 (Strong Buy) [5][6]

Company Announcement - FLSmidth & Co. A/S disclosed transactions made by its board members and executives in accordance with market abuse regulations [1][2] - The company has been granted power of attorney by its board members and executives to publish their trading activities [2] Executive Transactions - Mikko Keto, the CEO, sold 20,000 shares for a total of DKK 7,864,651.60 and now holds 23,484 shares [3] - The transaction was motivated by the need to fulfill tax obligations related to vested shares from long-term incentive plans [3] Company Overview - FLSmidth is a technology and service supplier to the global mining industry, focusing on improving performance, reducing costs, and minimizing environmental impact [4] - The company has set a sustainability goal, MissionZero, aiming for zero emissions in mining by 2030 and plans to become carbon neutral in its operations by 2030 [4]

Core Viewpoint - FLSmidth & Co. A/S has launched a share buy-back programme of up to DKK 1.4 billion, aimed at adjusting its capital structure and fulfilling obligations from share-based incentive programmes, with plans to propose cancellation of any repurchased shares not used for these obligations at a future General Meeting [1]. Group 1: Share Buy-Back Programme Details - The share buy-back programme is authorized by the Board of Directors, allowing the company to acquire its own shares up to 10 percent of its share capital before the next Annual General Meeting scheduled for 24 March 2026 [2]. - The programme will run from 25 June 2025 to no later than 20 March 2026, with a maximum repurchase amount of DKK 1.4 billion and up to 4,600,000 shares, representing approximately 8 percent of the company's share capital [4]. - Shares repurchased on any trading day cannot exceed 25 percent of the average daily trading volume over the preceding 20 trading days [5]. Group 2: Compliance and Management - The share buy-back programme will comply with EU regulations on market abuse and is managed independently by BNP Paribas, which will make all trading decisions without FLSmidth's involvement [3]. - Shares will be purchased at prices not exceeding the higher of the last independent transaction price or the highest independent bid, with a maximum deviation of 10 percent from the official price on Nasdaq Copenhagen at the time of acquisition [6]. - FLSmidth reserves the right to suspend the buy-back programme at any time, with announcements to be made regarding transactions at least every 7 trading days [7].