DALLAS - Flowserve Corporation (NYSE:FLS) shares plunged 11% after the flow control products provider reported third-quarter earnings that fell short of analyst expectations and issued disappointing full-year guidance.
The company posted adjusted earnings per share of $0.62 for Q3, missing the consensus estimate of $0.67. Revenue came in at $1.13 billion, in line with analyst projections and up 3.5% YoY.
Flowserve reaffirmed its full-year 2024 adjusted EPS guidance range of $2.60 to $2.75, which falls below the Wall Street consensus of $2.76. The company cited operational improvements but investors appeared focused on the earnings miss and soft outlook.
"Our third quarter results reflect strong operational performance, including meaningful year-over-year improvements in margins, EPS and cash flow," said Scott Rowe, Flowserve's President and CEO. However, he noted the results included a $0.07 per share charge related to certain long-term liabilities.
Total bookings rose 12.7% YoY to $1.20 billion, with original equipment bookings up 21.4% and aftermarket bookings increasing 5.6%. The company's backlog grew 3.7% sequentially to $2.8 billion.
Flowserve maintained its full-year revenue growth forecast of 4% to 6%. The guidance excludes the impact of its recently completed acquisition of MOGAS Industries.
Despite the earnings shortfall, Flowserve highlighted margin expansion, with adjusted gross margin improving 270 basis points YoY to 32.4% and adjusted operating margin up 240 basis points to 11.1%.
The significant stock decline suggests investors were disappointed by Flowserve's results and outlook, overshadowing the company's progress on margins and bookings growth.
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