Flowserve’s first quarter results were met with a significant negative market reaction, reflecting disappointment over a sharper-than-expected revenue decline. Management attributed the sales shortfall primarily to disruptions in the Middle East, which caused substantial delays in projects and limited access to customer sites. Additionally, a slow start to the year in North American maintenance, repair, and operations (MRO) business further impacted bookings. CEO Scott Rowe described the quarter as “a very noisy quarter with the Middle East disruption and some of the geopolitical activities,” emphasizing that while March bookings normalized, early-quarter weakness weighed on overall performance.
Is now the time to buy FLS? Find out in our full research report (it’s free for active Edge members).
Flowserve (FLS) Q1 CY2026 Highlights:
- Revenue: $1.07 billion vs analyst estimates of $1.17 billion (6.7% year-on-year decline, 8.8% miss)
- Adjusted EPS: $0.85 vs analyst estimates of $0.80 (6.2% beat)
- Adjusted EBITDA: $185 million vs analyst estimates of $181.5 million (17.3% margin, 1.9% beat)
- Management reiterated its full-year Adjusted EPS guidance of $4.10 at the midpoint
- Operating Margin: 11.2%, in line with the same quarter last year
- Backlog: $2.95 billion at quarter end, up 1.5% year on year
- Market Capitalization: $8.97 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Flowserve’s Q1 Earnings Call
-
Michael Halloran (Baird) asked about confidence in bookings growth in the second half given early-year softness. CEO Scott Rowe pointed to March and April booking strength and a robust project funnel as evidence of improving trends, but acknowledged timing remains uncertain due to geopolitical volatility.
-
Jose (Citi, for Andy Kaplowitz) questioned the causes behind the larger-than-expected revenue decline and the outlook for core business normalization. CFO Amy Schwetz explained that Middle East disruptions and a slow North American MRO start were primary drivers, but expressed confidence in sales improvement as run-rate business stabilizes.
-
Nathan Jones (Stifel) pressed for details on margin resilience despite volume declines. Rowe and Schwetz described how operational initiatives and cost discipline helped maintain margins, with the 80/20 program and supply chain consolidation mitigating deleverage effects.
-
Joseph Giordano (TD Cowen) asked for clarity on the phasing assumptions for Middle East recovery in the second half. Schwetz said guidance assumes gradual improvement, with some projects possibly slipping into next year, and noted multiple scenarios are being considered given ongoing uncertainty.
-
Unknown Analyst (RBC Capital Markets, for Deane Dray) inquired about nuclear backlog growth and prospects for new awards. Rowe confirmed steady bookings in nuclear and rising optimism for new traditional and small modular reactor projects, particularly in Europe and the U.S.
Catalysts in Upcoming Quarters
In upcoming quarters, the StockStory team will be watching (1) the pace of recovery and project restarts in the Middle East, (2) whether nuclear and traditional power segment awards translate into higher backlog conversion and revenue, and (3) the effectiveness of operational excellence and 80/20 initiatives in sustaining margin expansion. The closure and integration of the Trillium Valves acquisition will also be a key milestone.
Flowserve currently trades at $70.15, down from $84.25 just before the earnings. Is there an opportunity in the stock?See for yourself in our full research report (it’s free).
Our Favorite Stocks Right Now
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
Find out which 5 stocks it's flagging for this month - FREE. Get Our Top 5 Growth Stocks for Free HERE.
Stocks that have made our list include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.