Flowserve raises profit floor as backlog hits record, but Middle East delays cloud sales
Flowserve beat third-quarter adjusted earnings expectations, but converting orders into sales is facing more friction: the flow-control maker raised the low end of its adjusted-profit outlook while cutting its organic sales-growth forecast because of worsening conditions in the Middle East.
Profit and bookings move higher
Flowserve reported on October 28 reported EPS of $0.81 and adjusted EPS of $1.07, versus $0.90 adjusted EPS a year earlier. The MarketScreener consensus was about $0.98 for adjusted EPS, putting the reported figure roughly $0.09 above expectations. Revenue was about $1.24 billion, broadly in line with the $1.24 billion consensus.
The strongest operating signal was contracted demand: bookings rose 14% year over year to $1.38 billion, or 8% organically, while aftermarket bookings reached a record $728 million. Backlog ended at $3.5 billion, up 20% from a year earlier and the company’s highest level on record.
Cash flow and future sales are the counterweight
Cash generation was less favorable than bookings growth. Quarterly operating cash flow was $144.1 million, down from $401.8 million in the year-ago period; for the first nine months, it was $230.3 million versus $506.1 million. The release also shows $230.3 million of year-to-date operating cash flow through September, while nine-month capital spending was $51.1 million.
Management raised the low end of its 2026 adjusted EPS outlook: it now expects $4.10–$4.20, compared with $4.05–$4.20 previously. It cut the organic sales-growth outlook to down 2.5% to down 1.5%, from approximately down 1%. The company cited more challenging Middle East conditions, which are delaying customer activity and revenue conversion and could weigh on fourth-quarter sales.
That mix matters because adjusted operating margin expanded to 16.5% from 14.8% a year earlier, even as the company described underlying demand as healthy. The near-term risk is not a lack of orders but the timing of execution and collection: prolonged delays can keep backlog elevated without producing the same pace of revenue or cash flow.
Q3 bookings
$1.38B
↑ +14% year over year 8% organic
Backlog
$3.5B
↑ +20% year over year record high
Adjusted EPS
$1.07
↑ ~$0.09 above consensus consensus ~$0.98
Adjusted operating margin
16.5%
↑ +170 bps year over year
Sources
Quarterly revenue, Flowserve
Margins by quarter
Twelve quarters of figures
| Quarter | Q3 '23 | Q4 '23 | Q1 '24 | Q2 '24 | Q3 '24 | Q4 '24 | Q1 '25 | Q2 '25 | Q3 '25 | Q4 '25 | Q1 '26 | Q2 '26 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | $1.1B | $1.2B | $1.1B | $1.2B | $1.1B | $1.2B | $1.1B | $1.2B | $1.2B | $1.2B | $1.1B | $1.2B |
| Revenue growth | 25.4% | 12.2% | 10.9% | 7.1% | 3.5% | 1.3% | 5.3% | 2.7% | 3.7% | 3.5% | −6.7% | −1.6% |
| Gross margin | 29.0% | 29.1% | 31.2% | 31.6% | 31.5% | 31.5% | 32.3% | 34.2% | 32.4% | 34.8% | 35.6% | 32.9% |
| Operating margin | 6.4% | 9.4% | 10.4% | 10.5% | 9.1% | 10.6% | 11.5% | 12.3% | 6.8% | 3.5% | 11.2% | 13.0% |
| Net income | $46.2M | $62.6M | $74.2M | $72.6M | $58.4M | $77.5M | $73.9M | $81.8M | $220M | −$29.0M | $81.7M | $99.0M |
| Diluted EPS | $0.35 | $0.48 | $0.56 | $0.55 | $0.44 | $0.59 | $0.56 | $0.62 | $1.67 | −$0.21 | $0.64 | $0.77 |
| Cash from operations | $80.8M | $195M | $62.3M | −$12.8M | $179M | $197M | −$49.9M | $154M | $402M | −$0.2M | −$43.1M | $129M |
| Capital expenditure | $15.7M | $19.8M | $13.6M | $14.7M | $23.9M | $28.8M | $11.7M | $16.6M | $17.2M | $25.4M | $16.9M | $16.9M |
| Free cash flow | $65.1M | $175M | $48.7M | −$27.5M | $155M | $169M | −$61.7M | $138M | $385M | −$25.6M | −$60.0M | $112M |
| Dividends and buybacks | $26.2M | $26.2M | $30.2M | $41.2M | $31.5M | $27.6M | $48.7M | $59.3M | $173M | $83.9M | $26.7M | $53.1M |
This story describes figures the company has published. It is for information only and is not investment advice or a recommendation to buy, sell or hold any security. Check the original filings before relying on any figure. Stoqly is not affiliated with the SEC or Flowserve.
