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Flowserve (FLS) to Report Q2 Earnings: What's in the Cards?

Flowserve Corporation FLS is scheduled to release second-quarter 2020 results on Jul 30, after market close.

The company surpassed estimates thrice and missed once in the last four quarters, the negative earnings surprise being 9.00%, on average. Its first-quarter 2020 earnings of 21 cents per share lagged the Zacks Consensus Estimate of 41 cents by 48.78%.

In the past three months, the company’s shares have gained 9.6% compared with the industry’s growth of 15.5%.

 

 

Factors at Play

Flowserve is likely to have benefited from its solid backlog level in the second quarter, which stood at $2.18 billion at the end of the previous quarter. Also, given its broad technical services offering, the company is expected to have gained from the growing opportunities in the thermal solar market.

Moreover, its transformational realignment program to optimize its manufacturing platform and reduce costs might have been beneficial in the second quarter. Notably, its focus on improving on-time delivery, enhancing sales process and further leveraging on the supplier relationships might get reflected in the upcoming results.

In addition, in response to the coronavirus crisis, some of the actions taken by the company, including the reduction of discretionary expenses and the re-prioritization of its capital expenditure, are anticipated to have helped it maintain a healthy margin performance.

However, the impacts of the pandemic on its supply chain as well as the demand for its products and services along with the governmental regulations imposed in response to the crisis are anticipated to get reflected in Flowserve’s second-quarter results. Notably, challenging conditions, particularly in the chemical as well as oil and gas end markets, are expected to have adversely impacted bookings in the second quarter.

Notably, the Zacks Consensus Estimate for second-quarter revenues from the Flow Control Division segment is currently pegged at $261 million, indicating growth of 0.4% on a sequential basis. The consensus estimate for revenues from the Pump Division segment is pegged at $580 million, indicating a decline of 8.8% from the previous quarter’s reported figure.

Earnings Whispers

According to our quantitative model, a stock needs to have the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or at least 3 (Hold) to increase the odds of an earnings beat. But that is not the case here as we will see below.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: Flowserve has an Earnings ESP of -1.72%.

Flowserve Corporation Price and EPS Surprise

 

Flowserve Corporation Price and EPS Surprise

Flowserve Corporation price-eps-surprise | Flowserve Corporation Quote

Zacks Rank: Flowserve carries a Zacks Rank #2.

Key Picks

Here are some companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:

AptarGroup, Inc. ATR has an Earnings ESP of +12.47% and a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Greif, Inc. GEF currently has a Zacks Rank #3 and an Earnings ESP of +3.41%.

Eaton Corporation, plc ETN presently has a Zacks Rank #3 and an Earnings ESP of +5.80%.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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