- Email: [email protected]
Flowserve Corp, USA
COMPANY WATCH
ITT Corp, USA
Flowserve Corp, USA Key Figures (US$ million) Three months ended 31.3 2012
2011
1075.0
997.2
534.8 213.2
523.8 176.3
Cost of Sales
715.8
649.5
Gross Profit Of Which: EPD IPD
359.2
347.7
183.4 49.6
188.2 45.2
Selling, General and Admin Expense
221.9
222.6
Operating Income Of Which: EPD IPD
142.5
130.3
92.2 17.4
91.8 13.1
Net Earnings Attributable to Flowserve 93.1
97.0
Sales Of Which: EPD IPD
Key Figures (US$ million) Three months ended 31.3 2012
2011
Orders Of Which: Industrial Process
614
605
246
220
Revenue Of Which: Industrial Process
577
533
226
168
Costs of Revenue
404
365
Selling, General and Admin Expenses
101
86
Research and Development Expenses
17
16
5
60
13
16
Transformation Costs Asbestos-related Costs, Net Total Costs and Expenses
540
543
Operating Income/(Loss)
37
(10)
Income/(Loss) from Continuing Operations 10
(22)
Net Income
3
121
13
15
Capital Expenditures
COMMENT At US$1.25 billion, Flowserve Corp’s first quarter 2012 bookings were the company’s highest quarterly bookings since 2008. The 7.1% increase in first quarter bookings was led by solid long cycle original equipment orders in the chemical and oil & gas industries. Aftermarket bookings were also up 7.1%. Sales rose 7.8% to US$1.07 billion, reflecting increased original equipment and solid aftermarket sales in all divisions, while operating income was up 9.4% to US$142.5 million. Backlog of US$2.9 billion at 31 March 2012, including currency benefits of approximately US$35 million, compares with US$2.7 billion in backlog at the end of December 2011. Flowserve chief operating officer Tom Pajonas was encouraged by the increased levels of activity in the company’s long cycle business this quarter. “This business remains competitive, but our increased long cycle project visibility and the continued
8
Pump Industry Analyst
stabilisation of end markets provides optimism for continued improving business conditions in the near term. Also encouraging was the continued positive momentum in short cycle and aftermarket business that we have seen in recent quarters, where business conditions remain favourable,” said Pajonas. The Engineered Product Division (EPD) benefited from improving business conditions, with bookings up almost 14% and strong original equipment growth in the chemical, oil & gas and general industries and continued solid aftermarket activity. Pajonas said the recent Lawrence Pumps acquisition is off to an excellent start, with its strong first quarter performance demonstrating the benefits of applying Flowserve’s aftermarket strategy to its highly engineered pump products. Flowserve’s Industrial Product Division (IPD) enjoyed a solid increase in bookings on the strength of the oil & gas and chemical industries. ■ www.flowserve.com
COMMENT ITT Corp reported first quarter 2012 revenue of US$577 million, including 9% growth in organic revenue on the 2011 first quarter. First quarter 2012 revenue results included 22% growth in emerging markets and 11% growth in North America, as well as gains in core markets such as oil & gas, mining, chemical and general industrial. “In the first quarter, ITT delivered strong revenue growth and made investments that will provide the foundation for additional future growth, including expanding our automotive facility in Wuxi, China, and investing to support our other key drivers of profitable growth, including premier customer experience, aftermarket expansion, and technical and operational excellence,” said CEO and president Denise Ramos. “Our results also reflect the advantage we gain as a global industrial company from our
portfolio that is balanced and diversified across end markets, business cycles and geographies. We saw the benefits in the first quarter as our global growth in the oil & gas, mining and automotive markets offset expected lower volumes in the connectors market. In addition, despite overall market softness in Western Europe, we drove strong growth globally, particularly in North America, Asia and the Middle East. We believe that going forward our business model will position us well to continue building our track record of growth and value creation.” Industrial Process, which manufactures industrial pumps and valves for the oil & gas, chemical, mining and industrial markets, saw first quarter 2012 revenues increase by 35% to US$226 million, reflecting an increase in shipments across all regions and markets, particularly in Latin America where revenue increased 71%. ■ www.itt.com
May 2012
ITT Corp, USA
Flowserve Corp, USA Key Figures (US$ million) Three months ended 31.3 2012
2011
1075.0
997.2
534.8 213.2
523.8 176.3
Cost of Sales
715.8
649.5
Gross Profit Of Which: EPD IPD
359.2
347.7
183.4 49.6
188.2 45.2
Selling, General and Admin Expense
221.9
222.6
Operating Income Of Which: EPD IPD
142.5
130.3
92.2 17.4
91.8 13.1
Net Earnings Attributable to Flowserve 93.1
97.0
Sales Of Which: EPD IPD
Key Figures (US$ million) Three months ended 31.3 2012
2011
Orders Of Which: Industrial Process
614
605
246
220
Revenue Of Which: Industrial Process
577
533
226
168
Costs of Revenue
404
365
Selling, General and Admin Expenses
101
86
Research and Development Expenses
17
16
5
60
13
16
Transformation Costs Asbestos-related Costs, Net Total Costs and Expenses
540
543
Operating Income/(Loss)
37
(10)
Income/(Loss) from Continuing Operations 10
(22)
Net Income
3
121
13
15
Capital Expenditures
COMMENT At US$1.25 billion, Flowserve Corp’s first quarter 2012 bookings were the company’s highest quarterly bookings since 2008. The 7.1% increase in first quarter bookings was led by solid long cycle original equipment orders in the chemical and oil & gas industries. Aftermarket bookings were also up 7.1%. Sales rose 7.8% to US$1.07 billion, reflecting increased original equipment and solid aftermarket sales in all divisions, while operating income was up 9.4% to US$142.5 million. Backlog of US$2.9 billion at 31 March 2012, including currency benefits of approximately US$35 million, compares with US$2.7 billion in backlog at the end of December 2011. Flowserve chief operating officer Tom Pajonas was encouraged by the increased levels of activity in the company’s long cycle business this quarter. “This business remains competitive, but our increased long cycle project visibility and the continued
8
Pump Industry Analyst
stabilisation of end markets provides optimism for continued improving business conditions in the near term. Also encouraging was the continued positive momentum in short cycle and aftermarket business that we have seen in recent quarters, where business conditions remain favourable,” said Pajonas. The Engineered Product Division (EPD) benefited from improving business conditions, with bookings up almost 14% and strong original equipment growth in the chemical, oil & gas and general industries and continued solid aftermarket activity. Pajonas said the recent Lawrence Pumps acquisition is off to an excellent start, with its strong first quarter performance demonstrating the benefits of applying Flowserve’s aftermarket strategy to its highly engineered pump products. Flowserve’s Industrial Product Division (IPD) enjoyed a solid increase in bookings on the strength of the oil & gas and chemical industries. ■ www.flowserve.com
COMMENT ITT Corp reported first quarter 2012 revenue of US$577 million, including 9% growth in organic revenue on the 2011 first quarter. First quarter 2012 revenue results included 22% growth in emerging markets and 11% growth in North America, as well as gains in core markets such as oil & gas, mining, chemical and general industrial. “In the first quarter, ITT delivered strong revenue growth and made investments that will provide the foundation for additional future growth, including expanding our automotive facility in Wuxi, China, and investing to support our other key drivers of profitable growth, including premier customer experience, aftermarket expansion, and technical and operational excellence,” said CEO and president Denise Ramos. “Our results also reflect the advantage we gain as a global industrial company from our
portfolio that is balanced and diversified across end markets, business cycles and geographies. We saw the benefits in the first quarter as our global growth in the oil & gas, mining and automotive markets offset expected lower volumes in the connectors market. In addition, despite overall market softness in Western Europe, we drove strong growth globally, particularly in North America, Asia and the Middle East. We believe that going forward our business model will position us well to continue building our track record of growth and value creation.” Industrial Process, which manufactures industrial pumps and valves for the oil & gas, chemical, mining and industrial markets, saw first quarter 2012 revenues increase by 35% to US$226 million, reflecting an increase in shipments across all regions and markets, particularly in Latin America where revenue increased 71%. ■ www.itt.com
May 2012