Why Flowserve’s 2Q16 Results Disappointed Wall Street



Market reaction to Flowserve’s lower-than-expected 2Q16 earnings

Flowserve (FLS) announced its 2Q16 results after market hours on July 28, 2016. Lower-than-expected 2Q16 earnings sent FLS’s shares down to $47.18 during early trading. The stock closed at $47.85, a fall of 2.6% from its opening price of $49.13, on July 29.

From August 1, 2015, to August 1, 2016, FLS fell by 1.6%. During the same period, the broad-based S&P 500 Index (SPY) saw a 3.0% rise. From January 1, 2016, to August 1, 2016, FLS rose by 11.3%.

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Flowserve’s EPS missed market expectations in 2Q16

On a quarterly basis, FLS’s adjusted EPS (earnings per share) stood at $0.57, 6.6% below analysts’ consensus estimate of $0.61. Its 2Q15 EPS were $0.80. In 2Q16, the company’s EPS were unfavorably impacted by headwinds faced by the sector in the general and end markets in which it operates.

On a half-yearly basis, FLS’s adjusted EPS (earnings per share) stood at $0.96 per share in 1H16 compared to $1.41 per share in 1H15, a fall of 31.9%. Since 2013, FLS’s revenue and earnings have been impacted on account of broad end market weakness in energy, chemicals, and industrials (XLI).

Flowserve and its peers

FLS’s peers are Emcor Group (EME), Pentair (PNR), and Graco (GGG). EME’s 2Q16 EPS stood at $0.95 per share, a rise of 28.4% compared to $0.74 in 2Q15. PNR’s 2Q16 EPS stood at $1.11 per share, up 15.6% compared to $0.96 in 2Q15. GGG’s 2Q16 EPS stood at $0.89 per share, down 31.0% compared to $1.29 in 2Q15.

Let’s read on to know more about Flowserve’s 2Q16 revenue.


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