Flowserve Corporation Reports Third Quarter 2021 Results

Source: www.gulfoilandgas.com 10/27/2021, Location: North America

- Reported and Adjusted Earnings Per Share of 38 cents and 29 cents, respectively
- Financial results adversely affected by late-quarter supply chain and logistics challenges
- Bookings increased 13.1% year-over-year to $912 million, Backlog up 6.2% year-to-date
- Year-to-date operating cash flow of $151 million, up over 32 percent versus prior year
- Revised full-year 2021 financial guidance metrics, including Revenue and Adjusted EPS

Flowserve Corporation, a leading provider of flow control products and services for the global infrastructure markets, announced its financial results for the third quarter ended September 30, 2021.

Third Quarter 2021 Highlights (all comparisons to the 2020 third quarter, unless otherwise noted)1
- Reported Earnings Per Share (EPS) of $0.38 and Adjusted EPS2 of $0.29
- Reported EPS includes a net after-tax adjusted gain of $12.1 million, comprised of certain discrete tax items partially offset by realignment and financing costs and below-the-line foreign exchange impacts
- Total bookings were $911.6 million, up 13.1%, or 11.8% on a constant currency basis
- Original equipment bookings were $417.0 million, or 46% of total bookings, up 9.4%, or 7.9% on a constant currency basis
- Aftermarket bookings were $494.6 million, or 54% of total bookings, up 16.3%, or 15.3% on a constant currency basis
- Sales were $866.1 million, down 6.3%, or 7.3% on a constant currency basis
- Original equipment sales were $425.2 million, down 11.3%, or 12.5% on a constant currency basis
- Aftermarket sales were $440.9 million, down 0.9%, or 1.8% on a constant currency basis
- Reported gross and operating margins were 29.3% and 6.6%, respectively
- Adjusted gross and operating margins3 were 29.6% and 7.0%, respectively
- Backlog at September 30, 2021 was $1.97 billion, up 6.2% versus December 31, 2020

“We are encouraged that the visibility into our project funnel continues to improve, including numerous energy transition related opportunities. In the third quarter, we captured a number of energy transition awards, including bio-diesel, solar power and desalination projects,” said Scott Rowe, Flowserve’s president and chief executive officer. “Additionally, our aftermarket and MRO activity are expected to remain at or near pre-pandemic levels, while our capabilities to support our customers’ decarbonization and other energy transition initiatives will further support the increased project activity we see ahead. We are confident in our near-term outlook for year-over-year bookings growth which should position Flowserve well to deliver revenue and earnings growth in 2022.”

Rowe concluded, “Flowserve’s third quarter results reflected substantial global supply chain, logistics, and labor availability issues which deferred approximately $60 million of revenue and $20 million of gross profit out of the quarter. The global nature of our business and our operations network amplified the impact of these disruptions. We strongly believe in our ability to work through these challenges to restore a more normal backlog conversion rate in the coming quarters.”

Updated 2021 Guidance4
Consistent with the prior range, Flowserve’s 2021 Adjusted EPS target range excludes expected net after tax adjusted items of approximately $45 million, including realignment charges, the potential impact of below-the-line foreign currency effects and certain other discrete items. In a change to the approach for 2021, Flowserve 2.0 transformation-related expenses of approximately 5 cents per share will now be included in both the Company’s reported and adjusted EPS.

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