Flowserve's Q1 Earnings Beat Estimates, Revenues Increase Y/Y

Flowserve Corporation’s FLS first-quarter 2025 adjusted earnings (excluding 16 cents from non-recurring items) of 72 cents per share beat the Zacks Consensus Estimate of 59 cents. The bottom line increased 24.1% year over year. Results benefited primarily from higher revenues generated in the quarter.

Flowserve’s total revenues of $1.14 billion beat the consensus estimate of $1.11 billion. The top line increased 5.2% year over year. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Aftermarket sales increased 5.1% year over year, while Original equipment sales increased 5.4% year over year.

Total bookings amounted to $1.23 billion, reflecting an increase of 18.1% year over year. The backlog at the end of the quarter was $2.9 billion, up 11.1% year over year.

Segmental Details of FLS

Flowserve 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 Pumps Division segment were $783.1 million, up 1.8% year over year. Our estimate was $788.9 million. Bookings increased 21.2% year over year to $852.9 million. Segmental operating income was $136.5 million, up 23.1% year over year.

Revenues from the Flow Control Division segment were $364.1 million, up 13.6% year over year. Our estimate was $359.3 million. Bookings of $376.0 million increased 10.2% on a year-over-year basis. The segment’s operating income was $31.5 million, down 9.3% year over year.

Margin Profile of FLS

In the first quarter, Flowserve’s cost of sales increased 3.6% year over year to $775.2 million. Gross profit increased 9% year over year to $369.3 million and the margin increased 110 basis points (bps) to 32.3%. Selling, general and administrative expenses were $243.2 million, up 6.5% year over year.

Operating income increased 16.6% year over year to $131.9 million. The operating margin was 11.5%, up 110 bps year over year. The effective tax rate was 18.3%.

Flowserve’s Balance Sheet and Cash Flow

Exiting the first quarter, Flowserve had cash and cash equivalents of $540.8 million compared with $675.4 million at the end of 2024. Long-term debt (due after one year) was $1.45 billion compared with $1.46 billion reported at the end of 2024.

In the first three months of 2025, the company used net cash of $49.9 million from operating activities against $62.3 million in cash generated in the year-ago period. Capital expenditure totaled $11.8 million, down 13.8% year over year.

During the same period, the company used $27.7 million for distributing dividends and repurchased shares worth $21.1 million.

2025 Guidance of FLS

Flowserve continues to expect a 5-7% increase in revenues from the year-ago level. The company currently anticipates earnings per share (on an adjusted basis) to be between $3.10 and $3.30.

The adjusted tax rate is projected to be approximately 21%. The company forecasts net interest expense and capital expenditure to be $70 million and $80-$90 million, respectively.

FLS’ Zacks Rank

The company currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Companies

AZZ Inc. AZZ came out with quarterly earnings of $0.98 per share, beating the Zacks Consensus Estimate of $0.95. This compares with earnings of $0.93 per share a year ago.

AZZ reported revenues of $351.88 million, missing the consensus estimate by 3.77%. This compares with year-ago revenues of $366.5 million. 

Valmont Industries VMI reported revenues of $969.31 million in the first quarter of 2025, declining 0.9% on a year-over-year basis. Earnings per share of $4.32 for the same period compare with $4.32 a year ago.

The reported revenues compare with the Zacks Consensus Estimate of $975.6 million. The company delivered an earnings surprise of 1.89%, with the consensus estimate being $4.24 per share.

Pentair plc PNR came out with quarterly earnings of $1.11 per share in the first quarter of 2025, beating the Zacks Consensus Estimate of $1.01. This compares with earnings of $0.94 per share a year ago.

Pentair posted revenues of $1.01 billion for the quarter, surpassing the consensus estimate by 2.68%. This compares with year-ago revenues of $1.02 billion.

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This article originally published on Zacks Investment Research (zacks.com).

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