Long & Strong

 Flowserve (NYSE:FLS) shares rose 5.2% in after-hours trading Tuesday after the company reported first-quarter results including robust bookings growth, margin expansion and earnings momentum.

The flow control equipment manufacturer reported $1.2 billion in bookings, including a record $688.6 million in aftermarket orders, and a third consecutive quarter with more than $100 million in nuclear awards.

First-quarter revenue rose 5.2% year-over-year to $1.14 billion, beating the average estimate of $1.11 billion among Wall Street analysts.

Adjusted earnings climbed 24% to $0.72 a share, ahead of the consensus at $0.60 a share.

“Our first quarter results were a strong start to the year,” Chief Executive Scott Rowe said in a statement, highlighting “robust bookings growth, margin expansion and earnings acceleration” across Flowserve’s (NYSE:FLS) global operations. “These results demonstrate the strength of our diversified portfolio and the exceptional performance of our associates around the world operating under the Flowserve Business System.”

Margins and backlog rise

Gross margin expanded by 110 basis points to 32.3%, while adjusted gross margin improved to 33.5%, up 180 basis points from the year-ago period. Operating income reached $132 million, with adjusted operating income up 24% to $147 million. The company’s adjusted operating margin improved nearly 200 basis points year-over-year to 12.8%.

Flowserve’s backlog increased 11.1% to $2.9 billion, positioning the company for continued sales strength in the coming quarters.

Power and aftermarket segments lead growth

Flowserve reported a 16.3% year-over-year increase in original equipment bookings and nearly 20% growth in aftermarket bookings, driven by elevated demand in power and infrastructure markets. Notably, power sector bookings surged more than 45%, reflecting ongoing strength in nuclear and energy transition projects.

Cautious optimism amid tariff uncertainty

While reaffirming its full-year 2025 guidance of $3.10 to $3.30 in adjusted EPS, Flowserve acknowledged an increasingly dynamic macroeconomic landscape, shaped in part by newly implemented tariffs.

“As we pivot to the second quarter and rest of the year, the macro environment has become more dynamic as tariffs increase global uncertainty,” Rowe said. “With $2.9 billion of backlog, improved execution and expected benefits from the Flowserve Business System, we are positioned well to create value.”

Cash flow dips

One blemish in the quarterly results was a negative cash flow from operations of $49.9 million, a reversal from $62.3 million in positive cash flow in the first quarter of 2024. The company didn’t provide specific commentary on the shift but emphasized ongoing financial discipline and capital investments in line with long-term growth objectives.

Outlook maintained

Flowserve reiterated its expectations for 3% to 5% organic sales growth in 2025, with total sales projected to rise 5% to 7% when factoring in acquisitions. The company expects to spend $80 million to $90 million in capital expenditures this year and is projecting approximately $70 million in net interest expense and a 21% adjusted tax rate.