NEW YORK (TheStreet) -- Flowserve (FLS - Get Report) was rising 6.41% to $81.17 on Wednesday afternoon after the company, which manufactures seals, pumps, valves and components for the process industries, reported fourth-quarter earnings and issued first-quarter guidance that surpassed analysts' expectations.
The company reported diluted earnings per share of $1.01, or $141.08 million, up 7.4% from 94 cents per share, or $141.6 million, in the same period one year earlier. The 2013 EPS figure includes $13.8 million in discrete realignment, acquisition, legal and severance charges and $4.1 million of below-the-line FX currency effects. Excluding these items, EPS was $1.10, a 17% year-over-year increase. Revenue totaled $1.39 billion, a 4.6% year-over-year increase from $1.33 billion.
Analysts polled by Thomson Reuters expected EPS of $1.01 on revenue $1.39 billion.
Flowserve reaffirmed its full-year EPS guidance of $3.65 to $4, while analysts expected EPS of $3.95.
Finally, the company announced its board of directors has authorized the payment of a quarterly cash dividend of 16 cents per share, which marks a 14.3% increase from the 14 cents per share paid in Jan. 2014.
TheStreet Ratings team rates FLOWSERVE CORP as a "buy" with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate FLOWSERVE CORP (FLS) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, impressive record of earnings per share growth, increase in net income and notable return on equity. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 17.4%. Since the same quarter one year prior, revenues slightly increased by 5.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Powered by its strong earnings growth of 30.43% and other important driving factors, this stock has surged by 43.40% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, FLS should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- FLOWSERVE CORP has improved earnings per share by 30.4% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, FLOWSERVE CORP increased its bottom line by earning $2.86 versus $2.55 in the prior year. This year, the market expects an improvement in earnings ($3.39 versus $2.86).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Machinery industry average. The net income increased by 18.8% when compared to the same quarter one year prior, going from $106.30 million to $126.27 million.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. When compared to other companies in the Machinery industry and the overall market, FLOWSERVE CORP's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
- You can view the full analysis from the report here: FLS Ratings Report