FLS · Flowserve Corporation

Flowserve Corporation reported solid first quarter 2026 results marked by strong margin expansion despite a decline in sales. The company achieved an adjusted operating margin of 15.1%, a 230 basis point improvement over the prior year period, driven by what CEO Scott Rowe described as the "consistent execution of the Flowserve Business System." This margin performance helped drive adjusted diluted EPS to $0.85, an 18.1% increase year-over-year. However, reported EPS of $0.64 included specific discrete items, notably a $0.19 benefit from recoverable IEEPA tariffs, partially offset by a $0.06 impact from a Latin American tax matter and a $0.06 headwind from the ongoing conflict in the Middle East.

Operationally, total bookings decreased 6.4% to $1.15 billion, primarily due to a 13.0% drop in Original Equipment bookings, while Aftermarket bookings remained relatively stable with only a 1.2% decline. The company highlighted over $110 million in nuclear bookings during the quarter. Sales fell 6.7% to $1.07 billion, with organic sales declining 10.5%. Despite the revenue headwinds, the Flow Control Division demonstrated significant improvement, with segment operating income rising to $41.7 million from $31.5 million in the prior year, and operating margin expanding to 12.7% from 8.6%. The Flowserve Pumps Division saw a slight contraction in operating margin to 16.9% from 17.4%.

Looking forward, management reaffirmed its full-year 2026 adjusted EPS guidance of $4.00 to $4.20 but revised total sales growth guidance to a range of +3% to +6%, down from the prior outlook of +5% to +7%. The guidance assumes the acquisition of Trillium Flow Technologies’ Valves Division closes mid-year and remains roughly neutral to adjusted EPS. The company continues to navigate a dynamic environment, prioritizing employee safety in the Middle East while supporting critical infrastructure needs.