Flowserve (FLS) Q4 2008 earnings summary

Executive summary

• Record 2008 performance: sales $4.473B, operating income $612.9M, diluted EPS $7.74 and bookings $5.106B; added to the S&P 500 Index.

• Global footprint expanded to more than 150 Quick Response Centers across 55+ countries, supporting products, aftermarket services and critical infrastructure projects.

Financial highlights

• Sales rose to $4.473B from $3.763B in 2007; gross profit was $1.580B versus $1.248B.

• Operating income increased to $612.9M from $409.9M; diluted EPS from continuing operations was $7.74 versus $4.46.

• Bookings were $5.106B versus $4.319B; ending backlog reached $2.825B versus $2.277B.

• Cash flow from operating activities was $406.0M, compared with $417.4M in 2007.

Outlook and guidance

• Power outlook remained favorable, with opportunities in new plant construction, facility and environmental upgrades, maintenance, and nuclear-code-qualified products.

• Oil and gas prospects depend on crude and refined product demand; opportunities include deepwater, oil sands, LNG facilities, refining upgrades and aftermarket services.

• Water infrastructure demand, including desalination and long-distance water transport, was expected to support future product and service opportunities.

• Chemical outlook was tied to the global economic cycle; strategy focused on developing regions, aftermarket maintenance and specialty products.