Flowserve Raises Profit Floor as Bookings Rebound
Backlog reached $3.34 billion, including $225 million from the acquired Trillium business.
Industrial flow-control equipment maker Flowserve Corporation (FLS) posted a 25.5% increase in second-quarter bookings, reversing the prior quarter’s decline as demand strengthened across original equipment and aftermarket services.
Bookings reached $1.35 billion, up 17.4% sequentially after falling 6.4% from a year earlier in the first quarter. Original-equipment orders drove the turn, rising 43.9% from a year earlier to $652.3 million, while record aftermarket bookings advanced 12.1% to $695.8 million.
Sales fell 1.6% to $1.17 billion, with organic sales down 3.3%. The organic contraction narrowed from 10.5% in the prior quarter, and reported sales increased about 9.4% sequentially. Earnings rose to $0.77 a share from $0.62 a year earlier, while adjusted earnings increased to $0.95 a share from $0.91.
Adjusted gross margin increased one percentage point to 35.9%, extending Flowserve’s run of year-over-year expansion to 14 consecutive quarters. Adjusted operating margin widened 70 basis points to 15.3%, while reported operating margin rose to 13.0% from 12.3% a year earlier and 11.2% in the first quarter.
The Pumps division led the quarter, with bookings up 29.6% and sales down 0.6%. Its adjusted operating margin expanded one percentage point to 21.3%. Flow Control bookings rose 17.6% as sales declined 3.8%, while its adjusted operating margin edged up to 12.6%. The segment’s reported margin fell to 3.1% as realignment and acquisition-related adjustments weighed on results.
Backlog increased 16.9% from a year earlier, with Pumps backlog rising 11.3% and Flow Control backlog climbing 30.9%. Flowserve now expects organic sales to decline about 1% in 2026 and total sales to grow about 3%, lowering both forecasts because of the Middle East conflict. The company raised the bottom of its adjusted-earnings outlook by $0.05 and now expects $4.05 to $4.20 a share.
Operating cash flow declined to $129.2 million from $154.1 million a year earlier. Realignment charges increased to $40.7 million from $3.3 million, partly offset by a $27.7 million gain from remeasuring Flowserve’s prior stake in FAMCO.