Core Viewpoint - Flowserve Corporation has agreed to divest its wholly owned subsidiary BW/IP - New Mexico, Inc., which holds asbestos liabilities, to Acorn Investment Partners, allowing Flowserve to simplify its capital structure and focus on value-enhancing opportunities [1][2][4]. Transaction Overview - Acorn will acquire 100% of BW/IP, which will be capitalized with approximately $219 million in cash, including $199 million from Flowserve and $20 million from Acorn [4]. - Flowserve will remove all asbestos liabilities, related insurance assets, and associated deferred tax assets from its consolidated balance sheet as a result of this transaction [4]. Financial Impact - The divestiture is expected to result in a one-time loss of approximately $135 million in the fourth quarter of 2025, which will be excluded from adjusted earnings per share [5]. - The transaction is anticipated to improve Flowserve's free cash flow by approximately $15 million to $20 million annually [5]. Advisors - J.P. Morgan Securities LLC is serving as the financial advisor, while Baker McKenzie is the legal advisor for Flowserve [7].

Financial Performance - The company reported bookings of $1,213.0 million for the three months ended September 30, 2025, representing an increase of $9.4 million, or 0.8%, compared to the same period in 2024[160]. - Sales for the three months ended September 30, 2025, were $1,174.4 million, up from $1,133.1 million in the same period of 2024[160]. - Bookings for the nine months ended September 30, 2025, increased by $24.0 million, or 0.7%, compared to the same period in 2024[161]. - Sales for the three months ended September 30, 2025 increased by $41.3 million, or 3.6%, compared to the same period in 2024, driven by aftermarket customer sales[163]. - Sales for the nine months ended September 30, 2025 increased by $91.5 million, or 9.0%, compared to the same period in 2024, driven by increased customer sales in North America ($46 million) and Asia Pacific ($25 million)[204]. Profitability and Margins - Gross profit for the three months ended September 30, 2025 increased by $23.2 million, or 6.5%, with a gross profit margin of 32.4%, up from 31.5% in 2024[166]. - Gross profit for the Flowserve Pumps Division for the three months ended September 30, 2025, increased by $12.6 million, or 5.0%, with a gross profit margin of 33.2%[192]. - Gross profit for the three months ended September 30, 2025 increased by $7.7 million, or 7.2%, with a gross profit margin of 30.3%, up from 30.2% in the same period in 2024[205]. - Operating income for the three months ended September 30, 2025 decreased by $23.9 million, or 23.2%, with operating income as a percentage of sales at 6.7% compared to 9.1% in 2024[173]. - Operating income for the Flowserve Pumps Division for the three months ended September 30, 2025, increased by $25.6 million, or 23.4%, compared to the same period in 2024[197]. - Operating income for the nine months ended September 30, 2025 increased by $2.0 million, or 1.8%, despite a $27.6 million increase in SG&A[211]. Expenses and Costs - SG&A expenses for the three months ended September 30, 2025 increased by $46.2 million, or 17.8%, with SG&A as a percentage of sales rising to 26.0% from 22.9% in 2024[168]. - SG&A for the Flowserve Pumps Division for the three months ended September 30, 2025, decreased by $14.1 million, or 9.5%, compared to the same period in 2024[194]. - SG&A for the nine months ended September 30, 2025 increased by $27.6 million, or 15.4%, primarily due to increased acquisition and integration costs associated with the MOGAS acquisition[208]. - The company incurred $9.5 million in acquisition and integration-related costs for MOGAS for the nine months ended September 30, 2025[154]. Backlog and Future Expectations - Backlog as of September 30, 2025 was $2,896.1 million, an increase of $106.5 million, or 3.8%, from December 31, 2024, with approximately 41% related to aftermarket orders[165]. - The backlog at September 30, 2025, was $2,006.5 million, an increase of $76.1 million, or 3.9%, compared to December 31, 2024[198]. - The company expects to deliver annual revenue growth in 2025, supported by a strong backlog and improved execution following the acquisition of MOGAS[150]. Cash and Investments - The company has cash and cash equivalents of $833.8 million as of September 30, 2025, with $715.4 million of borrowings available under its credit agreement[151]. - Cash provided by operating activities for the nine months ended September 30, 2025 was $506.1 million, compared to $228.0 million for the same period in 2024[215]. - Cash balance increased by $158.4 million to $833.8 million at September 30, 2025, compared to December 31, 2024[214]. - Capital expenditures for the nine months ended September 30, 2025 were $45.5 million, a decrease of $6.6 million compared to the same period in 2024[220]. - The company has $254.9 million of remaining capacity for Board of Directors approved share repurchases as of September 30, 2025[225]. Tax and Other Income - The effective tax rate for the three months ended September 30, 2025 was 29.5%, up from 22.8% in 2024, influenced by state income taxes and foreign operations[179]. - The effective tax rate for the nine months ended September 30, 2025, increased to 24.5% from 22.4% in the same period of 2024[180]. - Other income for the three months ended September 30, 2025 increased by $262.1 million, primarily due to a $266.0 million payment received from the terminated Chart Merger[177]. - Other comprehensive income for the three months ended September 30, 2025, decreased by $64.6 million to a loss of $13.9 million compared to income of $50.7 million in the same period of 2024[182]. Market and Operational Risks - The company faces risks from global supply chain disruptions and inflation, which could increase manufacturing costs and affect product delivery efficiency[235]. - There is a substantial dependence on the success of the energy, chemical, and power generation industries for sales performance[235]. - The company is exposed to credit-related losses due to potential non-performance by counterparties to financial instruments[237]. - Increased aging and slower collection of receivables, particularly in Latin America and other emerging markets, could adversely affect cash flow[235]. - The company is at risk from potential adverse effects of new tariffs and retaliatory actions, impacting international operations[241]. - The company’s ability to maintain competitive positioning relies on successful development and introduction of new products and technologies, including AI and machine learning[241]. Foreign Currency Impact - The company recognized net foreign currency translation losses of $(16.9) million for Q3 2025, compared to gains of $52.9 million in Q3 2024[238]. - For the nine months ended September 30, 2025, the company reported foreign currency translation losses of $142.3 million, significantly higher than $0.2 million in the same period of 2024[238]. - As of September 30, 2025, the company had $199.3 million in aggregate notional amount outstanding in foreign exchange forward contracts, down from $695.9 million at December 31, 2024[239]. - A sensitivity analysis indicated that a 10% change in foreign currency exchange rates could impact net earnings by approximately $30.0 million for the nine months ended September 30, 2025[240].

Core Viewpoint - Flowserve Corporation is set to report its third-quarter 2025 earnings on October 28, 2025, with expectations of an EPS of $0.80 and revenue of approximately $1.21 billion, following a previous quarter where it exceeded EPS estimates but fell short on revenue expectations [1][2][6] Financial Performance - In the previous quarter, Flowserve reported an EPS of $0.91, surpassing the consensus estimate of $0.78, while its revenue was $1.19 billion, below the expected $1.22 billion [2][6] - The company achieved a return on equity of 18.25% and a net margin of 6.28%, indicating strong profitability and efficient equity utilization [2][6] Stock Metrics - Flowserve's stock recently increased by 1.4%, opening at $53.39, with a price-to-earnings (P/E) ratio of approximately 23.57 and a price-to-sales ratio of about 1.48 [3] - The enterprise value to sales ratio is around 1.39, and the enterprise value to operating cash flow ratio is approximately 13.47, reflecting the market's valuation of the company's earnings and sales [3] Financial Health - The company has a low debt-to-equity ratio of 0.10, suggesting a manageable level of debt relative to its equity [4][6] - Flowserve's current ratio is 2.10, indicating a strong ability to cover short-term liabilities with short-term assets, showcasing effective financial management [4][6] Future Projections - Analysts project Flowserve to achieve earnings of $3 per share for the current fiscal year and $4 per share for the next fiscal year, with the upcoming earnings report expected to significantly influence the stock price [5]

Group 1 - The article does not provide any specific content related to a company or industry [1]

Core Insights - Ferguson Enterprises Inc. (FERG) and Flowserve Corporation (FLS) are key players in the manufacturing - general industrial industry, competing in the industrial pump and valve markets [1][2] Ferguson Enterprises Inc. (FERG) - FERG is experiencing strong momentum in its U.S. business, with non-residential market revenues increasing by 6.8% year over year in fiscal 2025, contributing to half of its U.S. business [3][4] - The company's commercial and civil infrastructure markets saw revenue increases of 7% and 9%, respectively, although residential market softness partially offset these gains [4] - FERG's Canadian business also benefited from non-residential market strength, with revenues rising 3.7% year over year [5] - The company is focused on acquisitions to expand its customer base and product lines, completing four acquisitions in Q4 of fiscal 2025, which contributed approximately 1% and 4.9% to U.S. and Canada sales, respectively [6] - FERG's long-term debt stood at $3.75 billion at the end of fiscal 2025, with interest expenses increasing by 6.1% year over year to $190 million [7] - Rising costs are a concern, with the cost of goods sold increasing by 3.6% to $21.3 billion and selling, general, and administrative expenses rising by 5.6% to $6.4 billion in fiscal 2025 [8] Flowserve Corporation (FLS) - FLS is experiencing strong growth in its Pump and Flow Control Division segments, driven by robust aftermarket demand across various regions [9][11] - The Pump Division's revenues increased by 1.3% year over year in the first half of 2025, while the Flow Control Division saw a revenue surge of 10.1% [11] - FLS expects total revenues to grow by 5-6% in 2025, supported by its Diversify, Decarbonize, and Digitize (3D) strategy, which aims to expand its market presence and capitalize on investments in clean energy [12] - The MOGAS acquisition in October 2024 enhanced FLS's valve and automation portfolio, contributing positively to sales growth by 2.6% in Q2 2025 [13] - However, rising costs of sales and expenses are a concern, with cost of sales increasing by 1.1% to $1.56 billion and selling, general, and administrative expenses rising by 9% in the first half of 2025 [14] Financial Estimates and Valuation - The Zacks Consensus Estimate for FERG's fiscal 2026 sales is $32.1 billion, indicating a year-over-year growth of 4.4%, with earnings estimated at $10.59 per share, a 6.5% increase [15] - For FLS, the consensus estimate for 2025 sales is approximately $4.81 billion, reflecting a growth of 5.6%, with earnings projected at $3.37 per share, a significant increase of 28.1% [18] - FLS is trading at a forward price-to-earnings ratio of 13.97X, below its three-year median of 17.06X, while FERG's ratio is higher at 22.63X, above its median of 18.05X [21] Conclusion - FERG's strengths in the U.S. and Canada are tempered by weaknesses in the residential market and rising expenses, suggesting a cautious approach for investors [23] - In contrast, FLS's strong momentum and attractive valuation position it favorably for growth, despite potential margin pressures from rising operating expenses [24] - Overall, FLS appears to have an edge over FERG based on long-term prospects, revenue growth potential, and valuation metrics [25]

Group 1: Investment Activity - Paradice Investment Management LLC initiated a new position in Flowserve Corporation, acquiring 338,154 shares valued at approximately $17.97 million as of September 30, 2025 [1][2] - This new position accounts for 4.03% of Paradice's reportable U.S. equity assets as of the same date [3] Group 2: Company Overview - Flowserve Corporation reported trailing twelve months (TTM) revenue of $4.65 billion and net income of $291.58 million, with a dividend yield of 1.6% [4] - The company specializes in designing, manufacturing, and servicing industrial flow management equipment, including pumps, valves, mechanical seals, and automation solutions [4][5] Group 3: Market Position and Merger - Flowserve is involved in a merger of equals with Chart Industries, which is expected to generate $300 million in annual cost savings and create significant synergies [9][10] - The combined company is projected to have an enterprise value of approximately $19 billion and adjusted EBITDA of $1.9 billion, indicating a valuation of around 10 times adjusted EBITDA [10][11]

Core Viewpoint - FLSmidth has successfully met all regulatory approvals for the divestment of its Cement business to Pacific Avenue Capital Partners, with the transaction expected to close in Q4 2025 [1][2]. Company Announcement - The Cement business has been a part of FLSmidth for 143 years, significantly contributing to the company's foundation, capabilities, and global reputation [2]. - The completion of the transaction is seen as a pivotal milestone, allowing FLSmidth to focus exclusively on being a technology and service supplier to the global mining industry [2]. - FLSmidth's previously announced financial guidance for the full year 2025 remains unchanged despite the divestment [3]. Company Profile - FLSmidth is a full flowsheet technology and service supplier to the global mining industry, aiming to enhance performance, reduce operating costs, and minimize environmental impact [4]. - The company has set a sustainability ambition, MissionZero, targeting zero emissions in mining by 2030 and aims to achieve carbon neutrality in its operations by the same year [4].

Core Insights - Flowserve Corporation has appointed Alice DeBiasio as the President of the Flow Control Division, effective October 13, 2025 [1] Company Overview - Flowserve Corporation is a leading provider of flow control products and services for global infrastructure markets [1] Leadership Profile - Alice DeBiasio is recognized as an accomplished leader with extensive experience in managing global industrial organizations [1] - She has a proven track record in driving consistent profitable growth, innovation, and customer loyalty [1]

Industry Overview - The Zacks Manufacturing – General Industrial industry is expected to grow due to increased investments in product development and technological advancements [1] - Industry participants are focusing on digitalizing operations and expanding market presence through strategic acquisitions [1] Current Challenges - Persistent weakness in the manufacturing sector has negatively impacted the industry's outlook, with the Manufacturing Purchasing Manager's Index at 48.7% in August, indicating contraction [2][6] - Despite a slight expansion in the New Orders Index to 51.4%, it had been in contraction territory for the previous six months [6] Major Trends - Continuous investments in innovation and technological advancements are driving growth, with a focus on product upgrades and new product development [4] - An acquisition-based growth strategy is being employed to broaden customer bases and enhance product portfolios, allowing companies to enter new markets [5] Industry Performance - The Zacks Manufacturing – General Industrial industry currently holds a Zacks Industry Rank of 46, placing it in the top 19% of 245 Zacks industries, indicating bright near-term prospects [7][8] - Over the past year, the industry has underperformed compared to the broader sector and the S&P 500, growing 6.4% versus 9.1% for the sector and 18.8% for the S&P 500 [10] Valuation Metrics - The industry is currently trading at a forward 12-month Price-to-Earnings (P/E) ratio of 21.01X, which is above the sector's P/E of 19.82X but below the S&P 500's 23.24X [13] Key Companies - **Oshkosh Corporation (OSK)**: Engaged in offering purpose-built vehicles and equipment, benefiting from higher demand for Next Generation Delivery Vehicles and international tactical wheeled vehicles. The Zacks Consensus Estimate for 2025 earnings has been revised upward by 6.2% to $10.93 per share [18][19] - **Flowserve Corporation (FLS)**: Manufactures precision-engineered flow control equipment, benefiting from strong demand in North America, the Middle East, and Africa. The Zacks Consensus Estimate for 2025 earnings has been revised upward by 5% to $3.37 per share [22][23] - **Helios Technologies, Inc. (HLIO)**: Supplies engineered motion control and electronic controls technology solutions, with increased demand in the health and wellness market. The consensus estimate for 2025 earnings has been revised upward by 34.1% [26][27] - **Crane Company (CR)**: Manufactures specialized industrial solutions, positioned to gain from higher commercial aircraft build rates. The Zacks Consensus Estimate for 2025 earnings has been revised upward by 4% [30][31]

Core Insights - Flowserve Corporation (FLS) is positioned for growth due to strong performance across its segments, strategic acquisitions, and shareholder-friendly initiatives [1][4][9] - The company has achieved a Zacks Rank 1 (Strong Buy) and has outperformed the industry with a 21.1% gain over the past year compared to the industry's 10% growth [1][4] Business Strength - Flowserve is experiencing robust momentum in its Pump Division and Flow Control Division, driven by strong aftermarket demand in North America, the Middle East, and Africa [4] - The Flow Control Division's bookings increased by 5.9% year over year, supported by rising customer orders in energy and general industries [5] End Market Strength - The company's Diversify, Decarbonize, and Digitize (3D) strategy is enhancing booking levels, with ongoing investments in stormwater infrastructure and drainage projects contributing positively [6] - The chemical end market is benefiting from increased investments in petrochemical projects in the Middle East and Asia, while the power generation market sees solid bookings due to global investments in nuclear energy and combined-cycle power generation [6] - Flowserve reported $1.1 billion in bookings for Q2 2025, marking the 14th consecutive quarter with bookings exceeding $1 billion [6] Expansion Efforts - Flowserve has strengthened its business through acquisitions, notably acquiring MOGAS Industries in October 2024, which enhanced its valve and automation product portfolio [7] - The MOGAS acquisition contributed positively to sales growth, adding 2.6% to the Flow Control Division's performance in Q2 2025 [7][8] Rewards to Shareholders - The company has been rewarding shareholders through dividends and share buybacks, distributing $55.2 million in dividends and repurchasing $52.8 million in shares in the first half of 2025 [9]