Flowserve Corp. (FLS) Thursday reported an increase in profit for the fourth quarter, as revenues grew and gross margins strengthened. However, earnings for the quarter fell short of Street estimates by a penny, while revenues edged past expectations.
Flowserve, an oindustrial pumps and valves maker, boosted its dividend by 17 percent, replenished stock repurchase authorization to $750 million and approved a 3-for-1 stock split.
Flowserve's sales for the quarter grew 5 percent to $1.33 billion from $1.27 billion last year. Sales grew 6.5 percent excluding negative currency effects. Eleven analysts polled by Thomson Reuters had a consensus revenue estimate of $1.32 billion for the quarter
Engineered product division sales for the quarter grew 7.2 percent to $714.2 million, while industrial product division's revenues grew 1.5 percent to $265.5 million. Flow control division sales climbed 4.4 percent to $396.9 million.
Gross margin, or percentage of sales left after subtracting production costs, advanced 50 basis points to 33.7 percent from last year. Operating margin remained constant at 15.3 percent.
Bookings for the quarter dropped 5.6 percent to $1.08 billion.
Dallas, Texas-based Flowserve's fourth-quarter profit rose to $141.6 million or $2.83 per share from $125.1 million or $2.25 per share last year. Analysts expected earnings of $2.84 per share for the quarter. Analysts' estimates typically exclude special items.
Going forward, the company reaffirmed its 2013 earnings guidance of $9.60 to $10.60 per share. Analysts currently expect earnings of $10.28 per share for 2013.
Commenting on the outlook, Chief Executive Mark Blinn said, "While global macroeconomic uncertainty remains, we anticipate modest improvement in the US, stability in our European exposures and solid opportunities in the developing regions that we targeted with additional capacity in 2012."
Further, Flowserve expects first quarter of 2013 to be the "trough of the year," hurt mainly by the recent devaluation of Venezuela's currency and higher tax rage, and also due to the absence of a benefit related to a sale of a Brazilian facility.
Financial Chief Mike Taff said, "Although our 2013 earnings will be weighted toward the second half of the year, we remain confident in our ability to achieve our full-year goals."
In a separate release, the company announced a quarterly dividend of $0.42 per share, up 16.7 percent from previous dividend of $0.36 per share. The dividend is payable on April 12, to shareholders as of March 28. The company's board approved a replenished stock repurchase authorization of $750 million.
Flowserve's board also has approved a 3-for-1 stock split, which is subject to shareholder's approval. The company expects to vote on the issue at its Annual Meeting of Shareholders expected on May 23.
FLS closed Thursday's trading at $155.85, down $1.91 or 1.21%, on the NYSE.
by RTT Staff Writer
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