S&P 500 (NYSE:SPY) component Flowserve Corporation (NYSE:FLS) reported its results for the second quarter. Flowserve Corp. develops and manufactures flow control products and systems for the world’s most critical applications.
Flowserve Earnings Cheat Sheet for the Second Quarter
Results: Net income for Flowserve Corporation rose to $98.7 million ($1.76 per share) vs. $91.6 million ($1.62 per share) in the same quarter a year earlier. This marks a rise of 7.7% from the year earlier quarter.
Revenue: Rose 17.1% to $1.13 billion from the year earlier quarter.
Actual vs. Wall St. Expectations: FLS fell short of the mean analyst estimate of $1.78 per share. It beat the average revenue estimate of $1.06 billion.
Quoting Management: “I am proud of the results we achieved this quarter, which were largely consistent with our earlier views for the first half of the year,” said Mark Blinn, Flowserve president and chief executive officer. “We believe our results reflect solid performance against some unexpected challenges, partly attributable to external global events but also to some issues within our control, through which we maintained adjusted second quarter operating margins close to 14%. We are encouraged by our positive bookings trend, driven by our outstanding global workforce taking advantage of continued improvement in aftermarket activity and short cycle OEM markets, especially in our Flow Control Division. We have seen pricing conditions begin to improve in our short cycle markets and our outlook for our long cycle activities stabilize, where overall business conditions are beginning to improve. It is important to note that our bookings performance this quarter was accomplished without any large project orders, which reinforces our market view. This is also reflective of large, long cycle project activity continuing to be highly competitive and the discipline we have maintained in project selection.”
The company has now seen net income rise in three straight quarters. In the first quarter, net income rose 20.9% and in the fourth quarter of the last fiscal year, the figure rose 1.9%.
Gross margin shrank 2.9 percentage points to 32.8%. The contraction appeared to be driven by increased costs, which rose 22.5% from the year earlier quarter while revenue rose 17.1%.
The company fell short of forecasts after beating estimates in the previous two quarters. In the first quarter, it topped the mark by 13 cents, and in the fourth quarter of the last fiscal year, it was ahead by 2 cents.
The company’s revenue has now risen for two straight quarters. In the first quarter, revenue increased 4% to $997.2 million from the year earlier quarter.
(Source: Xignite Financials)