We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Flowserve (FLS) Q3 Earnings & Revenues Miss Estimates, Down Y/Y
Read MoreHide Full Article
Flowserve Corporation (FLS - Free Report) reported weaker-than-expected third-quarter 2021 results, wherein earnings and sales missed estimates by 27.5% and 3.4%, respectively.
The machinery company’s adjusted earnings were 29 cents per share, lagging the Zacks Consensus Estimate of 40 cents. The bottom line decreased 42% from the year-ago figure of 50 cents due to lower sales.
Revenue Details
In the quarter under review, Flowserve’s sales were $866.1 million, reflecting a year-over-year decline of 6.3%. The metric was down 7.3% on a constant currency basis.
The company’s top line missed the Zacks Consensus Estimate of $896.6 million.
Aftermarket sales in the reported quarter were down 0.9% year over year (or down 1.8% on a constant-currency basis) to $440.9 million. Original equipment sales totaled $425.2 million, reflecting a decrease of 11.3% (or 12.5% on a constant-currency basis).
Bookings totaled $911.6 million in the quarter, reflecting an increase of 13.1% (or 11.8% on a constant-currency basis) from the year-ago quarter. Backlog at the end of the reported quarter was $1.97 billion.
The company currently has two reportable segments — Flowserve Pump Division and Flow Control Division. A brief discussion of the segments is provided below:
Revenues from the Flowserve Pump Division were $601.8 million, decreasing 10.2% year over year or 11.2% on a constant-currency basis. Bookings rose 15.1% to $660.9 million.
Revenues from the Flow Control Division were $266.1 million, increasing 4.3% year over year or 3.2% on a constant-currency basis. Bookings of $253.6 million increased 6.7%.
Flowserve Corporation Price, Consensus and EPS Surprise
In the third quarter, Flowserve’s cost of sales decreased 4.1% year over year to $612.6 million. It represented 70.7% of sales compared with 69.1% in the year-ago quarter. Gross profit decreased 11.1% to $253.5 million and margin contracted 160 basis points (bps) to 29.3%. Selling, general and administrative expenses were $200.9 million, relatively stable year over year. It represented 23.2% of sales.
Operating income in the quarter under review decreased 34.2% year over year to $57.4 million. Adjusted operating margin decreased 390 bps to 7%. Net interest and other expenses (adjusted) jumped 6.3% to $13.5 million. Effective tax rate was 15.2% compared with 22.7% in the year-ago quarter.
Balance Sheet and Cash Flow
Exiting the third quarter of 2021, Flowserve had cash and cash equivalents of $1,457.3 million, up 131.2% from $630.4 million at the previous quarter-end. Long-term debt was $1,272.2 million, down 2.7% on a sequential basis.
In the first nine months of 2021, it generated net cash of $151.1 million from operating activities, up 32.2% from the previous-year period. Capital expenditure in the period totaled $34 million, decreasing 26.7% from $46.4 million spent a year ago.
During the first nine months of the year, the company used $78.6 million for distributing dividends and $17.5 million for repurchasing shares.
Outlook
For 2021, the company expects revenues to decline 3.5-4.5% year over year compared with a fall of 2-4% guided earlier. It predicts adjusted earnings per share in the range of $1.40-$1.45 compared with $1.45-$1.65 predicted earlier. Adjusted tax rate is expected to be 20% compared with 21-23% guided earlier.
For the year, its interest expense (net) is anticipated to be $55-$60 million while capital expenditures are likely to be $65 million.
Zacks Rank & Stocks to Consider
The company currently carries a Zacks Rank #4 (Sell).
Image: Bigstock
Flowserve (FLS) Q3 Earnings & Revenues Miss Estimates, Down Y/Y
Flowserve Corporation (FLS - Free Report) reported weaker-than-expected third-quarter 2021 results, wherein earnings and sales missed estimates by 27.5% and 3.4%, respectively.
The machinery company’s adjusted earnings were 29 cents per share, lagging the Zacks Consensus Estimate of 40 cents. The bottom line decreased 42% from the year-ago figure of 50 cents due to lower sales.
Revenue Details
In the quarter under review, Flowserve’s sales were $866.1 million, reflecting a year-over-year decline of 6.3%. The metric was down 7.3% on a constant currency basis.
The company’s top line missed the Zacks Consensus Estimate of $896.6 million.
Aftermarket sales in the reported quarter were down 0.9% year over year (or down 1.8% on a constant-currency basis) to $440.9 million. Original equipment sales totaled $425.2 million, reflecting a decrease of 11.3% (or 12.5% on a constant-currency basis).
Bookings totaled $911.6 million in the quarter, reflecting an increase of 13.1% (or 11.8% on a constant-currency basis) from the year-ago quarter. Backlog at the end of the reported quarter was $1.97 billion.
The company currently has two reportable segments — Flowserve Pump Division and Flow Control Division. A brief discussion of the segments is provided below:
Revenues from the Flowserve Pump Division were $601.8 million, decreasing 10.2% year over year or 11.2% on a constant-currency basis. Bookings rose 15.1% to $660.9 million.
Revenues from the Flow Control Division were $266.1 million, increasing 4.3% year over year or 3.2% on a constant-currency basis. Bookings of $253.6 million increased 6.7%.
Flowserve Corporation Price, Consensus and EPS Surprise
Flowserve Corporation price-consensus-eps-surprise-chart | Flowserve Corporation Quote
Margin Profile
In the third quarter, Flowserve’s cost of sales decreased 4.1% year over year to $612.6 million. It represented 70.7% of sales compared with 69.1% in the year-ago quarter. Gross profit decreased 11.1% to $253.5 million and margin contracted 160 basis points (bps) to 29.3%. Selling, general and administrative expenses were $200.9 million, relatively stable year over year. It represented 23.2% of sales.
Operating income in the quarter under review decreased 34.2% year over year to $57.4 million. Adjusted operating margin decreased 390 bps to 7%. Net interest and other expenses (adjusted) jumped 6.3% to $13.5 million. Effective tax rate was 15.2% compared with 22.7% in the year-ago quarter.
Balance Sheet and Cash Flow
Exiting the third quarter of 2021, Flowserve had cash and cash equivalents of $1,457.3 million, up 131.2% from $630.4 million at the previous quarter-end. Long-term debt was $1,272.2 million, down 2.7% on a sequential basis.
In the first nine months of 2021, it generated net cash of $151.1 million from operating activities, up 32.2% from the previous-year period. Capital expenditure in the period totaled $34 million, decreasing 26.7% from $46.4 million spent a year ago.
During the first nine months of the year, the company used $78.6 million for distributing dividends and $17.5 million for repurchasing shares.
Outlook
For 2021, the company expects revenues to decline 3.5-4.5% year over year compared with a fall of 2-4% guided earlier. It predicts adjusted earnings per share in the range of $1.40-$1.45 compared with $1.45-$1.65 predicted earlier. Adjusted tax rate is expected to be 20% compared with 21-23% guided earlier.
For the year, its interest expense (net) is anticipated to be $55-$60 million while capital expenditures are likely to be $65 million.
Zacks Rank & Stocks to Consider
The company currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks from the Zacks Industrial Products sector are Nordson Corporation (NDSN - Free Report) , AZZ Inc. (AZZ - Free Report) , and Brady Corporation (BRC - Free Report) . While Nordson currently sports a Zacks Rank #1 (Strong Buy), AZZ and Brady carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Nordson delivered an earnings surprise of 17.77%, on average, in the trailing four quarters.
AZZ delivered an earnings surprise of 25.47%, on average, in the trailing four quarters.
Brady delivered an earnings surprise of 2.49%, on average, in the trailing four quarters.