Flowserve raises low end of 2026 EPS guidance, cuts sales outlook

Flowserve Corporation (FLS) said on Oct. 28 that third-quarter 2026 adjusted earnings per share rose to $1.07. It also raised the low end of its full-year adjusted EPS guidance while lowering its organic sales growth outlook.

Adjusted EPS topped the $0.99 consensus estimate compiled by Finnhub. Revenue of $1.24 billion was in line with the $1.25 billion consensus estimate from the same source.

The company makes engineered and industrial pumps, seals and valves and operates in more than 50 countries, according to the release.

Bookings reached $1.38 billion, up 14.1% from $1.21 billion a year earlier. Organic bookings rose 7.7%, and aftermarket bookings were a record $728 million.

Backlog reached $3.5 billion, up 19.9% from $2.9 billion a year earlier. The release calls it the largest backlog in the company's history.

Reported EPS was $0.81, down from $1.67 a year earlier. Net earnings attributable to the company were $103.0 million, against $219.6 million. The year-earlier period included a $266 million merger termination fee paid to the company in connection with the terminated Chart Industries merger.

Reported operating margin was 12.5%, up from 6.7%. Adjusted operating margin was 16.5%, up from 14.8%.

President and Chief Executive Officer Scott Rowe said, "Our teams delivered another quarter of meaningful bookings growth, adjusted operating margin expansion, and higher adjusted earnings per share while navigating ongoing Middle East disruption."

Here's how the company did:

• Adjusted EPS: $1.07 vs. $0.99 expected, according to Finnhub, and $0.90 a year earlier
• Reported EPS: $0.81 vs. $1.67 a year earlier
• Revenue: $1.24 billion vs. $1.17 billion a year earlier, in line with the $1.25 billion estimate, according to Finnhub
• Operating margin: 12.5% vs. 6.7%
• Adjusted operating margin: 16.5% vs. 14.8%

2026 guidance

The company raised the low end of its adjusted EPS range to $4.10 to $4.20, from $4.05 to $4.20. It cut its organic sales growth forecast to a decline of 2.5% to 1.5%, from the approximately 1% decline it gave on July 29.

Total sales growth is now expected at 2% to 3%, from approximately 3%. The company now expects acquisitions to add about 350 basis points, up from about 300, and capital expenditures of about $90 million, down from $100 million.

Net interest expense of about $85 million and an adjusted tax rate of 21% to 22% are unchanged. The guidance assumes tariff rates in place as of Oct. 1, 2026.

The company said Middle East conditions are delaying customer activity and revenue conversion and are expected to affect fourth-quarter sales.

Segment results

Flowserve Pumps Division bookings rose to $940.1 million from $819.5 million, and sales rose to $830.4 million from $800.3 million. Its operating margin was 20.2%, up from 16.9%.

Flow Control Division bookings rose to $446.2 million from $396.1 million, and sales rose to $411.6 million from $377.4 million. Its operating margin fell to 8.3% from 12.3%.

The division recorded a $16.2 million gain on the divestiture of its PMV Automation business.

Cash flow and charges

Cash from operations was $144.1 million in the quarter, down from $401.8 million a year earlier. Through nine months, the company made $517.7 million in acquisition payments, repurchased $75.0 million of common shares, and paid $82.9 million in dividends.

Net income swung from a profit of $219.6 million in the third quarter of 2025 to a loss of $29.0 million in the fourth quarter of 2025, according to its SEC filings.

The company will host a conference call on Oct. 29 at 8:30 a.m. ET. It said it will also make a presentation that day on its financial and operating results.