Flowserve Swings to Profit

It benefits from oil and gas market strength.
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Flowserve (FLS) - Get Report, a maker of pumps, valves and mechanical seals, said it swung to a profit in the third quarter.

The Irving, Texas-based company earned $28.2 million, or 50 cents a share, in the quarter, compared with a loss of $10 million, or 19 cents a share, a year ago. Earnings from continuing operations were $27 million, or 48 cents a share, in the quarter, compared with $5 million, or 8 cents a share, a year ago. Earnings in the year-ago period included a refinancing expense of 31 cents a share. Analysts polled by Thomson First Call were expecting earnings of 60 cents a share for the quarter.

Third-quarter revenue rose 18.7% to $771 million because of strength in the oil and gas market, particularly in the Middle East and North America and expansion into the Asia-Pacific region.

Gross profit was up 18% at $248 million and operating income rose 10% to $60.4 million.

By segment, Flowserve pump division revenue rose 25% to $401 million; from flow control it increased 15% to $258 million; and from flow solutions it increased 8.6% to $123 million.

"We remain excited about Flowserve's future business prospects, given our strong markets, significant backlog and operational excellence programs. Also, now that we are current SEC report filers, our Finance organization will be able to focus more effort on cost reduction and supporting the operations. We think 2006 is shaping up to be a very good year and expect 2007 to be even better," the company said.

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