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Flowserve (FLS) Q2 Earnings & Revenues Top Estimates, Rise Y/Y
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Flowserve Corporation’s (FLS - Free Report) second-quarter 2024 adjusted earnings (excluding 18 cents from non-recurring items) of 73 cents per share beat the Zacks Consensus Estimate of 63 cents. The bottom line increased 40.4% year over year. Results primarily benefited from higher revenues, partially offset by an increase in operating costs and expenses.
Flowserve’s total revenues of $1.16 billion beat the consensus estimate of $1.12 billion. The top line increased 7.1% year over year. Sales increased 7.7% on a constant-currency basis.
Aftermarket sales increased 5% year over year (up 5.8% on a constant-currency basis) to $590.5 million. Original equipment sales totaled $566.4 million, reflecting an increase of 9.4% year over year (up 9.8% on a constant-currency basis).
Total bookings amounted to $1.25 billion, reflecting an increase of 12.2% (up 13% on a constant-currency basis) year over year. The backlog at the end of the quarter was $2.7 billion, up 2.8% sequentially.
Segmental Details
FLS 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 segment were $812.2 million, up 6.1% year over year. Our estimate was $792.2 million. Bookings increased 18.3% year over year to $898.8 million. Segmental operating income was $131 million, up 33.7% year over year.
Revenues from the Flow Control Division segment were $347.7 million, up 9.4% year over year. Our estimate was $328.5 million. Bookings of $349.2 million decreased 2.9% on a year-over-year basis. The segment’s operating income was $32.3 million, down 10.5% year over year.
Flowserve Corporation Price, Consensus and EPS Surprise
In the second quarter, Flowserve’s cost of sales increased 4.4% year over year to $790.8 million. Gross profit increased 13.4% year over year to $366.1 million and the margin increased 170 basis points (bps) to 31.6%. Selling, general and administrative expenses were $238.6 million, up 6.5% year over year.
Operating income increased 25.5% year over year to $121.3 million. The adjusted operating margin was 12.5%, up 210 bps year over year. The effective tax rate was 23.8%.
Balance Sheet and Cash Flow
Exiting the second quarter, Flowserve had cash and cash equivalents of $515.1 million compared with $545.7 million at the end of December 2023. Long-term debt (due after one year) was $1.21 billion compared with $1.17 billion at the end of December 2023.
In the first six months of 2024, the company generated net cash of $49.5 million from operating activities compared with $50.4 million in the year-ago period. Capital expenditure totaled $28.3 million, down 11.3% year over year.
During the same period, the company used $55.3 million for distributing dividends.
2024 Guidance
Flowserve continues to expect a 4-6% increase in revenues from the year-ago levels. The company anticipates earnings per share (on a reported basis) to be between $2.25 and $2.45. Adjusted earnings per share are now estimated in the $2.60–$2.75 band, higher than the earlier guidance of $2.50-$2.70. The Zacks Consensus Estimate for adjusted earnings is pegged at $2.68 per share.
The adjusted tax rate is projected to be approximately 21%. The company forecasts net interest expense and capital expenditure to be in the range of $60-$65 million and $75-$85 million, respectively.
Pentair plc (PNR - Free Report) reported second-quarter adjusted earnings per share of $1.22, which beat the Zacks Consensus Estimate of $1.15. The reported figure also improved 18% from the year-ago quarter.
Net sales rose 1.6% year over year to $1.1 billion. PNR’s top line outpaced the Zacks Consensus Estimate of $1.09 billion.
Crown Holdings, Inc. (CCK - Free Report) reported second-quarter adjusted earnings per share of $1.81, which beat the Zacks Consensus Estimate of $1.59. The bottom line improved 8% year over year.
Net sales totaled $3.04 billion, down 2.2% from the year-ago quarter. The top line missed the Zacks Consensus Estimate of $3.06 billion.
A. O. Smith Corporation’s (AOS - Free Report) second-quarter adjusted earnings of $1.06 per share missed the Zacks Consensus Estimate of $1.07. However, the bottom line increased 5% on a year-over-year basis.
Net sales of $1.02 billion surpassed the consensus estimate of $992 million. The top line increased 7% year over year, driven by strong demand for residential and commercial water heaters in North America.
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Flowserve (FLS) Q2 Earnings & Revenues Top Estimates, Rise Y/Y
Flowserve Corporation’s (FLS - Free Report) second-quarter 2024 adjusted earnings (excluding 18 cents from non-recurring items) of 73 cents per share beat the Zacks Consensus Estimate of 63 cents. The bottom line increased 40.4% year over year. Results primarily benefited from higher revenues, partially offset by an increase in operating costs and expenses.
Flowserve’s total revenues of $1.16 billion beat the consensus estimate of $1.12 billion. The top line increased 7.1% year over year. Sales increased 7.7% on a constant-currency basis.
Aftermarket sales increased 5% year over year (up 5.8% on a constant-currency basis) to $590.5 million. Original equipment sales totaled $566.4 million, reflecting an increase of 9.4% year over year (up 9.8% on a constant-currency basis).
Total bookings amounted to $1.25 billion, reflecting an increase of 12.2% (up 13% on a constant-currency basis) year over year. The backlog at the end of the quarter was $2.7 billion, up 2.8% sequentially.
Segmental Details
FLS 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 segment were $812.2 million, up 6.1% year over year. Our estimate was $792.2 million. Bookings increased 18.3% year over year to $898.8 million. Segmental operating income was $131 million, up 33.7% year over year.
Revenues from the Flow Control Division segment were $347.7 million, up 9.4% year over year. Our estimate was $328.5 million. Bookings of $349.2 million decreased 2.9% on a year-over-year basis. The segment’s operating income was $32.3 million, down 10.5% year over year.
Flowserve Corporation Price, Consensus and EPS Surprise
Flowserve Corporation price-consensus-eps-surprise-chart | Flowserve Corporation Quote
Margin Profile
In the second quarter, Flowserve’s cost of sales increased 4.4% year over year to $790.8 million. Gross profit increased 13.4% year over year to $366.1 million and the margin increased 170 basis points (bps) to 31.6%. Selling, general and administrative expenses were $238.6 million, up 6.5% year over year.
Operating income increased 25.5% year over year to $121.3 million. The adjusted operating margin was 12.5%, up 210 bps year over year. The effective tax rate was 23.8%.
Balance Sheet and Cash Flow
Exiting the second quarter, Flowserve had cash and cash equivalents of $515.1 million compared with $545.7 million at the end of December 2023. Long-term debt (due after one year) was $1.21 billion compared with $1.17 billion at the end of December 2023.
In the first six months of 2024, the company generated net cash of $49.5 million from operating activities compared with $50.4 million in the year-ago period. Capital expenditure totaled $28.3 million, down 11.3% year over year.
During the same period, the company used $55.3 million for distributing dividends.
2024 Guidance
Flowserve continues to expect a 4-6% increase in revenues from the year-ago levels. The company anticipates earnings per share (on a reported basis) to be between $2.25 and $2.45. Adjusted earnings per share are now estimated in the $2.60–$2.75 band, higher than the earlier guidance of $2.50-$2.70. The Zacks Consensus Estimate for adjusted earnings is pegged at $2.68 per share.
The adjusted tax rate is projected to be approximately 21%. The company forecasts net interest expense and capital expenditure to be in the range of $60-$65 million and $75-$85 million, respectively.
Zacks Rank
The company currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Industrial Companies
Pentair plc (PNR - Free Report) reported second-quarter adjusted earnings per share of $1.22, which beat the Zacks Consensus Estimate of $1.15. The reported figure also improved 18% from the year-ago quarter.
Net sales rose 1.6% year over year to $1.1 billion. PNR’s top line outpaced the Zacks Consensus Estimate of $1.09 billion.
Crown Holdings, Inc. (CCK - Free Report) reported second-quarter adjusted earnings per share of $1.81, which beat the Zacks Consensus Estimate of $1.59. The bottom line improved 8% year over year.
Net sales totaled $3.04 billion, down 2.2% from the year-ago quarter. The top line missed the Zacks Consensus Estimate of $3.06 billion.
A. O. Smith Corporation’s (AOS - Free Report) second-quarter adjusted earnings of $1.06 per share missed the Zacks Consensus Estimate of $1.07. However, the bottom line increased 5% on a year-over-year basis.
Net sales of $1.02 billion surpassed the consensus estimate of $992 million. The top line increased 7% year over year, driven by strong demand for residential and commercial water heaters in North America.