The following is a summary of the Flowserve Corporation (FLS) Q4 2023 Earnings Call Transcript:
Financial Performance:
Flowserve Corporation reported a robust annual revenue growth of nearly 20% and an increase in full-year earnings per share (EPS) by 90% due to improved adjusted gross and operating margins.
The company's Q4 sales led to their highest quarterly sales level since 2015, recording a 12% Y-o-Y increase.
Q4 operating cash flow stood at $195 million, marking a significant improvement of $125 million.
Adjusted gross margins rose by 100 basis points to 29.8% in Q4, compared to the same quarter last year.
Bookings for the year amounted to $4.25 billion, pushing the year-end backlog to $2.7 billion.
Full-year 2023 EPS reached $2.10, while Q4 EPS was $0.68.
Business Progress:
Flowserve's growth was fueled by increased backlog conversion and significant operational progress.
Despite the Full-year 2023 book-to-bill ratio being below 1.0x, the backlog for 2024 remains healthy at $2.7 billion.
The company shifted focus on its 3D strategy: Diversify, Decarbonize, Digitize, which contributed to bookings growth in 2023 and is expected to drive further growth.
The company also continued the development of their RedRaven technology, now employed at over 80 customer locations.
Ambitious targets for 2024 have been set by Flowserve including 4%-6% revenue growth, more than 100 basis points adjusted operating margin improvement, and around 20% adjusted EPS growth.
Flowserve announced a 5% increase to dividend to $0.21 per share and replenished their authorized share repurchase capacity to $300 million.
The company also plans to invest in M&A opportunities and anticipate a full year's revenue growth of 4% to 6% for 2024.
More details: Flowserve IR
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