Flowserve Corporation (FLS) reported fully diluted earnings per share (EPS) of $1.42 for the first quarter of 2010, down 13.4%, including net currency charges of 16 cents related to the Venezuelan Bolivar devaluation and realignment charges of 1 cent, plus another 16 cents in other expense, relating to other after-tax currency charges.
Revenues were $959 million for the first quarter of 2010, down 6.4% compared with the year-ago period, or 11.0% excluding currency benefits of $47 million. Bookings were $1.07 billion, up 10.7%, or 5.6% excluding currency benefits of $49 million.
Segment Details
FSG Engineered Product Division (EPD): EPD order bookings for the first quarter of 2010 were $592.4 million, a year-over-year increase of $112.5 million (23.4%), or 18.2% excluding currency benefits of approximately $25 million. EPD sales for the first quarter of 2010 were $531.8 million, a year-over-year decrease of $7.4 million (1.4%), or 6.0% excluding currency benefits of approximately $25 million.
FSG Industrial Product Division (IPD): IPD order bookings for the first quarter of 2010 were $194.4 million, a year-over-year decrease of $20.9 million (9.7%), or 14.4% excluding currency benefits of approximately $10 million. IPD sales for the first quarter of 2010 were $196.1 million, a year-over-year decrease of $18.2 million (8.5%), or 13.6% excluding currency benefits of approximately $11 million.
The company reaffirmed its 2010 full-year EPS target range of between $6.35 and $7.15, which includes the full impact of up to $20 million, or 26 cents per share, in realignment costs and the after-tax charge of approximately $14 million, or 25 cents per share, related to the Venezuelan currency devaluation.
Over the last several years, emerging markets around the globe have been investing in infrastructure projects. These new projects include power generation plants, water treatment systems and mining. This build-out has required process controls in oil and gas, chemical and water markets—all of which are Flowserve’s core businesses. Also, Flowserve is benefiting from older infrastructure that needs to be upgraded to meet environmental standards.
Flowserve has expanded its business across the globe; revenues outside North America now account for more than 60% of its total revenues. This diversification strategy should help mitigate the impact of an economic downturn in any one of its industries or countries that its serves.
Flowserve Corporation is a world leading manufacturer and aftermarket service provider of comprehensive flow control systems. The company was incorporated in the State of New York on May 1, 1912.
We currently have a Neutral recommendation on Flowserve.
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