Flowserve Corporation today reported its financial results for the second quarter ended June 30, 2016.
Second Quarter 2016 Highlights:
- Reported Earnings Per Share of $0.48 includes $0.09 per share of adjusted items, as detailed herein, and approximately $0.01 per share of negative currency translation
- Adjusted Earnings Per Share (EPS)[2] was $0.57, excluding the adjusted items but including the negative currency translation
- Adjusted Earnings Per Share (EPS)[2] was $0.57, excluding the adjusted items but including the negative currency translation
- Sales were $1.03 billion, down 11.7% or 9.7% on a constant currency basis, and up 6.7% sequentially on a constant currency basis
- Original equipment sales were $574 million, down 13.5% on a constant currency basis
- Aftermarket sales were $456 million, down 4.8% on a constant currency basis
- Original equipment sales were $574 million, down 13.5% on a constant currency basis
- Aftermarket sales were $456 million, down 4.8% on a constant currency basis
- Total Bookings were $975 million, down 10.1% on a constant currency basis, and up 4.0% sequentially on a constant currency basis
- Aftermarket bookings were $480 million, up 2.3%, and 5.6% sequentially, on a constant currency basis
- Aftermarket bookings were $480 million, up 2.3%, and 5.6% sequentially, on a constant currency basis
- Adjusted gross margin decreased 130 basis points to 32.7%
- Achieved approximately $27 million of realignment savings in the quarter, with progress to date on track to deliver expected incremental savings of approximately $100 million in 2016
- Backlog at June 30, 2016 was $2.10 billion, down 3.2% versus year-end 2015
“We delivered solid results in the 2016 second quarter which were generally in-line with our expectations for the period,” said Mark Blinn, Flowserve’s president and chief executive officer. “Our aftermarket business remained resilient during the quarter, evidenced by modest constant currency bookings growth. For the larger project original equipment opportunities, however, we expect that our customers will remain cautious, and that capital investment decisions will remain deliberate and the process iterative until our customers’ confidence improves. In spite of headwinds, we realized traction from our commercial strategies within in all areas, notably the IPD segment, driving constant currency bookings growth of 3.4%.
“We continue to make significant progress on our transformational realignment program. Since the commencement of our program, we have initiated actions on two-thirds of the manufacturing facilities expected to be closed, repurposed or sold and we remain on pace to deliver expected incremental savings of approximately $100 million for this year. We also continue to execute on our targeted growth strategies, which together with our efforts to optimize the manufacturing platform and reduce our cost structure, will better position Flowserve for profitable growth and increased shareholder value creation.”
“Although our served markets currently remain challenged and volatile, Flowserve is committed to remaining disciplined in its project pursuit and taking the actions necessary to better position the Company for the future,” Blinn concluded.
Second Quarter 2016
For the second quarter of 2016, Flowserve delivered Adjusted EPS of $0.57 on revenues of $1.03 billion. Adjusted operating margins were 11.7%, down 300 basis points year-over-year and up 230 basis points sequentially. Second quarter Adjusted EPS excludes the impact of realignment expenses of $0.11, $0.01 of SIHI purchase price accounting and integration costs and $0.03 of below-the-line foreign currency income, but includes $0.01 of negative currency translation. On a reported basis, earnings for the second quarter were $0.48 per share, compared to $0.56 per share in the 2015 second quarter.
Commenting on second quarter 2016 performance, Karyn Ovelmen, Flowserve’s executive vice president and chief financial officer, said, “Flowserve continues to actively focus on our disciplined cost management and realignment actions to reduce the impact of volume declines and price competitiveness in this end-market environment. Our adjusted gross margin performance of nearly 33% reflects continued bidding discipline, a mix shift towards aftermarket and early realignment savings which partially mitigate current market headwinds. Importantly, the long-term outlook for our served end-markets remains promising, as we continue delivering on our realignment initiatives and growth strategies to better serve our customers and deliver value for our shareholders.”
To view the original press release, please click here.
Search for Flowserve on CIMdata.com
