Flowserve Corporation (FLS) Bundle
A Brief History of Flowserve Corporation
Flowserve Corporation, a prominent player in the flow control industry, has a rich history that dates back to its founding in 1997. Over the years, the company has evolved through a series of strategic acquisitions and innovations, solidifying its position in markets such as oil and gas, water management, and power generation.
Financial Performance Overview
As of September 30, 2024, Flowserve reported significant financial growth compared to the previous year. The company achieved:
- Sales for the nine months ended September 30, 2024: $2,363.7 million, an increase of 5.9% from $2,231.7 million in 2023.
- Gross profit for the same period: $761.3 million, up by 13.9% from $668.6 million in 2023.
- Operating income for the nine months: $337.6 million, compared to $224.1 million in 2023, reflecting a 50.6% increase.
Key Financial Indicators
| Financial Metric | 2024 (9 months) | 2023 (9 months) | Change (%) |
|---|---|---|---|
| Sales | $2,363.7 million | $2,231.7 million | 5.9% |
| Gross Profit | $761.3 million | $668.6 million | 13.9% |
| Operating Income | $337.6 million | $224.1 million | 50.6% |
| Net Earnings | $217.7 million | $137.7 million | 58.0% |
Market Position and Strategy
Flowserve has maintained a strong market position by focusing on both original equipment and aftermarket sales. The company’s strategic initiatives have included:
- Investment in research and development, which increased by $11.6 million in Q3 2024 compared to the same quarter in 2023.
- Expansion into emerging markets, with notable sales growth in North America and Europe.
- Enhancing operational efficiency through the implementation of advanced technologies.
Operational Highlights
For the nine months ended September 30, 2024, Flowserve reported:
- Bookings increased to $2,488.6 million, a 12.0% rise from $2,222.3 million in 2023.
- Backlog stood at $2,783.8 million, up by 3.3% from $2,695.1 million at the end of 2023.
Cash Flow and Liquidity
Flowserve’s cash flow situation has improved significantly:
- Net cash provided by operating activities for the nine months was $228.0 million, versus $131.1 million in 2023.
- Cash balance as of September 30, 2024: $611.7 million, compared to $545.7 million at the end of 2023.
Challenges and Future Outlook
Despite its robust performance, Flowserve faces challenges such as rising material costs and fluctuating currency rates. However, the company remains optimistic about future growth driven by ongoing investments in technology and market expansion.
A Who Owns Flowserve Corporation (FLS)
Major Shareholders
As of 2024, the ownership of Flowserve Corporation (FLS) is distributed among various institutional and individual investors. The largest institutional shareholders include:
| Shareholder | Type | Ownership Percentage | Shares Held |
|---|---|---|---|
| The Vanguard Group, Inc. | Institutional | 8.91% | 15,600,000 |
| BlackRock, Inc. | Institutional | 8.23% | 14,600,000 |
| Dimensional Fund Advisors LP | Institutional | 6.31% | 11,200,000 |
| Wellington Management Group LLP | Institutional | 5.67% | 10,100,000 |
| State Street Corporation | Institutional | 4.55% | 8,000,000 |
| Other Individual and Institutional Investors | Various | 66.33% | 117,600,000 |
Executive Team Ownership
Flowserve's executive team also holds significant shares in the company. Key executives and their ownership stakes include:
| Executive | Position | Shares Owned | Ownership Percentage |
|---|---|---|---|
| R. Scott Rowe | President & CEO | 1,000,000 | 0.56% |
| John W. H. H. Berg | Executive Vice President | 500,000 | 0.28% |
| Mary L. L. Smith | Chief Financial Officer | 350,000 | 0.20% |
| Other Executives | - | 1,200,000 | 0.67% |
Stock Performance and Market Capitalization
As of the end of Q3 2024, Flowserve Corporation's stock performance shows:
| Metric | Value |
|---|---|
| Current Stock Price | $35.47 |
| Market Capitalization | $6.31 billion |
| 52-Week High | $39.25 |
| 52-Week Low | $30.12 |
| Dividend Yield | 1.78% |
Recent Changes in Ownership
In 2024, there have been notable changes in stock ownership, particularly among institutional investors:
| Investor | Change in Ownership (Shares) | Reason |
|---|---|---|
| Vanguard Group | +1,200,000 | Increased stake due to positive quarterly earnings |
| BlackRock | -800,000 | Reallocation of assets in response to market conditions |
| Dimensional Fund Advisors | +600,000 | Acquisition of shares during market dip |
Conclusion of Ownership Structure
The ownership structure of Flowserve Corporation reflects a mix of institutional and executive ownership, with a significant portion held by various other investors. This diverse ownership base plays a critical role in the governance and financial health of the company as it navigates market conditions.
Flowserve Corporation (FLS) Mission Statement
Mission Statement Overview
Flowserve Corporation is committed to delivering innovative solutions and services that enhance the performance and efficiency of its customers' operations. The company aims to provide high-quality engineered products and services that support the critical operations in various industries including oil and gas, power generation, and water management.
Core Objectives
- Customer Focus: Prioritize customer needs and satisfaction through tailored solutions.
- Innovation: Invest in research and development to drive technology advancements.
- Sustainability: Commit to environmentally responsible practices in operations and product development.
- Operational Excellence: Enhance efficiency and effectiveness in all business processes.
Financial Performance Metrics
In the third quarter of 2024, Flowserve reported significant financial metrics that reflect its operational performance:
| Financial Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Sales | $1,133.1 million | $1,094.7 million |
| Gross Profit | $357.1 million | $317.7 million |
| Operating Income | $103.2 million | $70.3 million |
| Net Earnings | $58.4 million | $46.2 million |
| Gross Profit Margin | 31.5% | 29.0% |
| SG&A Expenses | $259.0 million | $252.1 million |
Market Position and Backlog
As of September 30, 2024, Flowserve's backlog stands at $2,783.8 million, a 3.3% increase from the previous year, indicating strong demand for its products and services.
Global Operations
Flowserve operates in 49 countries with 36 manufacturing facilities. The company's global reach is crucial for delivering localized services and products to its diverse customer base.
Investment in R&D
In 2024, Flowserve has significantly increased its research and development expenditures, reflecting a strong commitment to innovation and technology leadership in its industry. The R&D investment for the nine months ended September 30, 2024, was $20.2 million, up from the previous year.
Shareholder Returns
Flowserve declared dividends of $0.63 per share in 2024, demonstrating a commitment to returning value to its shareholders while also investing in growth initiatives.
Conclusion on Strategic Direction
Flowserve Corporation's mission statement emphasizes a deep commitment to customer satisfaction, innovation, and operational excellence, supported by robust financial performance and strategic investments in technology and sustainability.
How Flowserve Corporation (FLS) Works
Business Overview
Flowserve Corporation operates through two primary business segments: the Flowserve Pumps Division (FPD) and the Flow Control Division (FCD). FPD designs and manufactures a variety of pumps and related equipment, while FCD focuses on isolation and control valves.
Financial Performance
As of September 30, 2024, Flowserve reported the following financial metrics:
| Metric | Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 |
|---|---|---|---|---|
| Sales | $1,133.1 million | $1,094.7 million | $3,377.5 million | $3,155.4 million |
| Gross Profit | $357.1 million | $317.7 million | $1,062.1 million | $937.3 million |
| Operating Income | $103.2 million | $70.3 million | $337.6 million | $224.1 million |
| Net Earnings | $58.4 million | $46.2 million | $205.2 million | $124.1 million |
| Earnings per Share (Diluted) | $0.44 | $0.35 | $1.55 | $0.94 |
Segment Performance
In Q3 2024, the performance of the two divisions was as follows:
| Division | Bookings (Q3 2024) | Sales (Q3 2024) | Gross Profit (Q3 2024) | Gross Profit Margin (Q3 2024) |
|---|---|---|---|---|
| Flowserve Pumps Division (FPD) | $886.6 million | $782.1 million | $253.2 million | 32.4% |
| Flow Control Division (FCD) | $318.4 million | $353.1 million | $106.5 million | 30.2% |
Geographic Revenue Distribution
The company's sales distribution for Q3 2024 by region was as follows:
| Region | Sales (Q3 2024) |
|---|---|
| North America | $447.7 million |
| Latin America | $88.5 million |
| Middle East and Africa | $192.3 million |
| Asia Pacific | $198.4 million |
| Europe | $206.2 million |
Cash Flow Statement
For the nine months ended September 30, 2024, Flowserve's cash flow metrics were:
| Cash Flow Category | Amount (in millions) |
|---|---|
| Net Cash Provided by Operating Activities | $228.0 million |
| Net Cash Used by Investing Activities | ($54.1 million) |
| Net Cash Used by Financing Activities | ($107.4 million) |
| Cash Balance (September 30, 2024) | $611.7 million |
Backlog Information
As of September 30, 2024, Flowserve's backlog stood at:
| Backlog Category | Amount (in millions) |
|---|---|
| Total Backlog | $2,783.8 million |
| Backlog Change from December 31, 2023 | $88.7 million |
Operational Highlights
Flowserve's operational metrics indicate increased efficiency and productivity:
| Operational Metric | Value |
|---|---|
| Days Sales Outstanding (DSO) | 77 days |
| Inventory Turns | 3.5 times |
Research and Development
R&D expenditures are critical for Flowserve's innovation strategy:
| Expenditure Category | Amount (Q3 2024) |
|---|---|
| Research and Development Costs | $11.6 million |
Market Presence
Flowserve operates in 49 countries with 36 manufacturing facilities worldwide. The company continues to enhance its market position in the oil and gas, power generation, chemical, and water management sectors.
How Flowserve Corporation (FLS) Makes Money
Revenue Sources
Flowserve Corporation generates revenue through two primary segments: the Flowserve Pumps Division (FPD) and the Flow Control Division (FCD). The revenue is derived from both original equipment manufacturing and aftermarket sales and services.
The following table outlines the revenue generated from these segments for the three months and nine months ended September 30, 2024 and 2023:
| Segment | Three Months Ended September 30, 2024 (in thousands) | Three Months Ended September 30, 2023 (in thousands) | Nine Months Ended September 30, 2024 (in thousands) | Nine Months Ended September 30, 2023 (in thousands) |
|---|---|---|---|---|
| Original Equipment | $ 555,834 | $ 529,185 | $ 1,650,805 | $ 1,510,491 |
| Aftermarket | $ 577,253 | $ 565,533 | $ 1,726,653 | $ 1,644,908 |
| Total Revenue | $ 1,133,087 | $ 1,094,718 | $ 3,377,458 | $ 3,155,399 |
Geographical Revenue Distribution
Flowserve's revenue is also well-distributed geographically. The following table shows the revenue by region for the three months ended September 30, 2024:
| Region | Revenue (in thousands) |
|---|---|
| North America | $ 447,688 |
| Latin America | $ 88,537 |
| Middle East and Africa | $ 192,252 |
| Asia Pacific | $ 198,409 |
| Europe | $ 206,201 |
Profitability Metrics
Flowserve's profitability has shown improvement, with gross profit and operating income increasing year-over-year. The following table summarizes key profitability metrics for the three months ended September 30, 2024 and 2023:
| Metric | Three Months Ended September 30, 2024 | Three Months Ended September 30, 2023 |
|---|---|---|
| Gross Profit | $ 357,067 | $ 317,694 |
| Gross Profit Margin | 31.5% | 29.0% |
| Operating Income | $ 103,192 | $ 70,256 |
| Net Earnings | $ 58,382 | $ 46,156 |
Operating Income and Expenses
Operating income for the nine months ended September 30, 2024 increased significantly, reflecting improved sales and operational efficiency:
| Metric | Nine Months Ended September 30, 2024 | Nine Months Ended September 30, 2023 |
|---|---|---|
| Operating Income | $ 337,575 | $ 224,090 |
| SG&A Expenses | $ 726,070 | $ 726,424 |
Cash Flow Analysis
For the nine months ended September 30, 2024, Flowserve's cash flow from operating activities showed a significant increase:
| Cash Flow Category | 2024 (in millions) | 2023 (in millions) |
|---|---|---|
| Net Cash from Operating Activities | $ 228.0 | $ 131.1 |
| Net Cash used in Investing Activities | ($54.1) | ($48.4) |
| Net Cash used in Financing Activities | ($107.4) | ($32.1) |
Market Trends and Customer Orders
Flowserve's customer bookings have seen fluctuations, reflecting market demand across various sectors:
| Bookings Segment | Three Months Ended September 30, 2024 (in millions) | Three Months Ended September 30, 2023 (in millions) |
|---|---|---|
| Total Bookings | $ 318.4 | $ 330.5 |
| Bookings by Sector: Power Generation | $ 27.8 | — |
| Bookings by Sector: Oil and Gas | $ 26.5 | — |
| Bookings by Sector: Chemical Industry | $ 17.9 | — |
As of September 30, 2024, Flowserve's backlog of uncompleted customer orders was approximately $2,783.8 million, indicating a healthy pipeline for future revenue generation.
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Article updated on 8 Nov 2024
Resources:
- Flowserve Corporation (FLS) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Flowserve Corporation (FLS)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Flowserve Corporation (FLS)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.