Flowserve’s first quarter results were driven by strong aftermarket bookings, robust operational execution, and continued momentum in nuclear and energy markets. Management emphasized that aftermarket orders surpassed $600 million for the fourth consecutive quarter, underpinned by a $50 million nuclear upgrade project and healthy demand across general industries. CEO Scott Rowe highlighted Flowserve’s “focus on growing the aftermarket business” and the benefits of the company’s 80-20 complexity reduction program, which contributed to improved margins and operational consistency. Pricing actions and disciplined cost management also played roles in offsetting rising material costs and macroeconomic uncertainties.
Is now the time to buy FLS? Find out in our full research report (it’s free).
Flowserve (FLS) Q1 CY2025 Highlights:
- Revenue: $1.14 billion vs analyst estimates of $1.1 billion (5.2% year-on-year growth, 3.6% beat)
- Adjusted EPS: $0.62 vs analyst estimates of $0.60 (3% beat)
- Adjusted EBITDA: $171.5 million vs analyst estimates of $144.8 million (15% margin, 18.4% beat)
- Management reiterated its full-year Adjusted EPS guidance of $3.20 at the midpoint
- Operating Margin: 11.5%, up from 10.4% in the same quarter last year
- Backlog: $2.9 billion at quarter end, up 11.1% year on year
- Market Capitalization: $6.07 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Flowserve’s Q1 Earnings Call
- Andy Kaplowitz (Citigroup) asked about the sustainability of high aftermarket bookings and whether the current run rate can continue. CEO Scott Rowe responded that the pipeline remains healthy, but acknowledged some uncertainty in the second half of 2025 due to tariffs and macro factors.
- Mike Halloran (Baird) inquired about Flowserve’s global manufacturing footprint and pricing power amid tariffs. Rowe explained that the company’s regional manufacturing presence is a competitive advantage and that recent price increases are expected to be effective, though their stickiness will be assessed in coming quarters.
- Deane Dray (RBC Capital Markets) asked for detail on pricing dynamics between aftermarket and original equipment, as well as MOGAS integration progress. Rowe stated that aftermarket pricing is less elastic and that MOGAS synergy capture is ahead of plan, with strong aftermarket margins.
- Nathan Jones (Stifel) questioned visibility into the project pipeline and timing of potential project deferrals. Rowe noted that most projects for the next two quarters are already committed, with greater uncertainty in bookings for 2026 and beyond, especially outside the nuclear sector.
- Joe Giordano (TD Cowen) sought clarification on decarbonization trends and macro assumptions in guidance. Management explained that demand for carbon capture and LNG projects remains steady, and current guidance reflects today’s tariff, inflation, and demand environment.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will be watching (1) how effectively Flowserve mitigates tariff-related cost pressures through pricing and supply chain shifts, (2) whether aftermarket and nuclear bookings sustain their current momentum, and (3) the pace of synergy realization and margin improvement from the MOGAS acquisition. Progress on operational excellence and the 80-20 program will also be important markers for future performance.
Flowserve currently trades at $47.80, up from $44.89 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free).
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