Flowserve Corporation (FLS) has been benefiting from solid bookings, driven by strong original equipment and aftermarket activity. Solid booking levels highlight strength across the company’s end markets. FLS’ Diversify, Decarbonize and Digitize strategy has also been supporting its growth. Notably, its third-quarter 2024 bookings of $1.2 billion marked the eleventh consecutive quarter of more than $1 billion bookings.Strength across its original equipment and aftermarket businesses is supporting both the F ...

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Financial Data and Key Metrics Changes - The company reported sales of $1.1 billion, reflecting a year-over-year growth of 3.5% [11] - Adjusted EPS for the third quarter was $0.62, a 24% increase compared to the previous year [11] - Cash from operations reached $178 million, driven by working capital efficiency and earnings improvements [11][42] - Adjusted operating margin expanded by 240 basis points year-over-year to 11.1% [38] Business Line Data and Key Metrics Changes - The company achieved strong aftermarket bookings of approximately $615 million, marking two consecutive quarters above the $600 million level [20] - Original equipment and aftermarket work each represented about half of total bookings, with original equipment awards contributing approximately $130 million [19] - FPD segment delivered an adjusted operating margin of 16.4%, a 410 basis point improvement year-over-year [40] - FCD segment's adjusted operating margin was 14%, showing a 60 basis point sequential improvement [41] Market Data and Key Metrics Changes - Bookings in the oil and gas sector increased by 7% to nearly $455 million, driven by activity in the Middle East [21] - Power bookings rose nearly 30% to $155 million in the quarter, with year-to-date growth at 23% [22] - Nuclear activity saw over $100 million in bookings, supported by life extensions and new capacity being built [25] Company Strategy and Development Direction - The company is focused on its 3D growth strategy, which emphasizes diversification and decarbonization, contributing to 34% of total bookings [17][48] - The acquisition of MOGAS Industries is expected to enhance the company's offerings and support long-term value creation [15] - A portfolio excellence program has been launched to optimize product offerings and improve customer service, targeting a margin improvement of 100 to 200 basis points by 2027 [13][14] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the power markets and the potential for significant growth in global power demand over the next decade [24][27] - The company anticipates continued strength in the aftermarket business and a healthy project pipeline, particularly in the Middle East [60][62] - Management reaffirmed full-year guidance metrics, expecting adjusted earnings per share to be between $2.60 and $2.75 [31] Other Important Information - The company completed the acquisition of MOGAS Industries, which is expected to provide $15 million in cost synergies by the end of year two [16][45] - The cash conversion cycle improved by nine days year-over-year, indicating enhanced working capital efficiency [42][81] Q&A Session Summary Question: Insights on bookings and market conditions - Management noted that the aftermarket business remains healthy, with strong utilization rates in process industries and robust project activity in the Middle East [56][60] Question: Q4 EPS guidance and revenue ramp - Management indicated that the revenue ramp in Q4 is expected to be smaller than in previous years, primarily due to improved conversion rates and strength in the aftermarket business [63][64] Question: Portfolio excellence program and margin targets - Management confirmed the launch of a formal portfolio excellence program, expecting to see early results and reaffirming the target of 100 to 200 basis points margin improvement by 2027 [69][72] Question: Free cash flow and operational changes - Management highlighted improvements in cash conversion and inventory processes, indicating a structural change that could lead to higher free cash flow conversion rates in the future [78][82] Question: Importance of selectivity in bookings - Management emphasized the importance of being selective in project awards to ensure long-term profitability and aftermarket entitlement [86]

Core Insights - Flowserve Corporation's third-quarter 2024 adjusted earnings per share were 62 cents, missing the Zacks Consensus Estimate of 67 cents, but reflecting a 24% year-over-year increase [1] - Total revenues for the quarter were $1,133 million, surpassing the consensus estimate of $1,127 million, with a year-over-year increase of 3.5% [2] - Total bookings reached $1.2 billion, marking a 12.7% year-over-year increase, with a backlog of $2.8 billion at the end of the quarter, up 3.7% sequentially [3] Revenue and Sales Performance - Flowserve's revenues from the Pump Division were $782.1 million, up 2.1% year over year, with bookings increasing 20.7% to $886.6 million [4] - The Control Division generated revenues of $353.1 million, a 6.8% year-over-year increase, although bookings decreased 3.7% to $318.4 million [5] Margin and Cost Analysis - The cost of sales remained flat at $776 million, while gross profit increased 12.4% to $357.1 million, resulting in a gross margin of 31.5%, up 250 basis points [6] - Operating income rose 46.8% year over year to $103.2 million, with an operating margin of 9.1%, up 270 basis points [6] Balance Sheet and Cash Flow - At the end of the third quarter, Flowserve had cash and cash equivalents of $611.7 million, up from $545.7 million at the end of 2023, with long-term debt stable at $1.17 billion [7] - The company generated net cash of $228 million from operating activities in the first nine months of 2024, compared to $131.1 million in the previous year [7] Dividend and Share Repurchase - During the same period, Flowserve distributed $82.8 million in dividends and repurchased shares worth $20.1 million [8] 2024 Guidance - Flowserve expects a revenue increase of 4-6% from the previous year, with earnings per share projected between $2.15 and $2.35, and adjusted earnings per share estimated in the range of $2.60–$2.75 [9][10]

Core Insights - Flowserve reported revenue of $1.13 billion for the quarter ended September 2024, reflecting a year-over-year increase of 3.5% and a slight surprise of +0.52% over the Zacks Consensus Estimate [1] - The earnings per share (EPS) for the quarter was $0.62, which is an increase from $0.50 in the same quarter last year, but fell short of the consensus estimate of $0.67, resulting in an EPS surprise of -7.46% [1] Revenue and Earnings Performance - Flowserve's sales in the FPD segment were $781.37 million, slightly below the average estimate of $785.87 million, marking a year-over-year increase of 2% [3] - The FCD segment reported sales of $351.72 million, exceeding the average estimate of $340 million, with a year-over-year growth of 6.4% [3] - Intersegment sales were reported at -$2.17 million, slightly worse than the average estimate of -$2.10 million [3] Operating Income Metrics - Adjusted Operating Income for the FCD segment was $49.40 million, below the average estimate of $51.47 million [3] - The segment operating income for Eliminations and All Other was -$52.80 million, worse than the average estimate of -$40.18 million [3] - Adjusted Operating Income for the FPD segment was $128.10 million, surpassing the average estimate of $117.74 million [3] Stock Performance - Flowserve's shares have returned +2.5% over the past month, compared to a +2% change in the Zacks S&P 500 composite [4] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance in the near term [4]

Flowserve (FLS) came out with quarterly earnings of $0.62 per share, missing the Zacks Consensus Estimate of $0.67 per share. This compares to earnings of $0.50 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -7.46%. A quarter ago, it was expected that this company that makes pumps, valves and other parts for the oil and gas industries would post earnings of $0.63 per share when it actually produced earnings of $0.73, deliveri ...

The upcoming report from Flowserve (FLS) is expected to reveal quarterly earnings of $0.67 per share, indicating an increase of 34% compared to the year-ago period. Analysts forecast revenues of $1.14 billion, representing an increase of 3.8% year over year.The consensus EPS estimate for the quarter has been revised 1.7% higher over the last 30 days to the current level. This reflects how the analysts covering the stock have collectively reevaluated their initial estimates during this timeframe.Before a com ...

Flowserve Corporation (FLS) recently completed its previously announced acquisition of MOGAS Industries for $305 million, which includes the potential earnout. The company funded the transaction through its cash balance. Based in Houston, TX, MOGAS is engaged in providing mission-critical severe service valves and related aftermarket services. The company's products are sold to several end markets, including power, mining and process industries. It has an extensive geographic presence with sales and service ...

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