Flowserve Trims Sales Outlook on Middle East, Lifts Profit Floor as Backlog Hits Record

Flowserve trimmed its 2026 sales outlook on Wednesday, citing worsening conditions in the Middle East, but raised the low end of its adjusted profit forecast after margins widened and its order backlog hit a record.

The Dallas-based maker of pumps, valves and seals now expects full-year organic sales to fall 2.5% to 1.5%, compared with its prior forecast of a decline of about 1%, according to the earnings release it filed with an 8-K on Wednesday. At the same time, it lifted its adjusted EPS guidance to $4.10 to $4.20, from $4.05 to $4.20.

Middle East slows conversion

"We are lowering our full-year sales growth outlook to reflect more challenging operating conditions in the Middle East, which are delaying customer activity and revenue conversion and are expected to impact fourth-quarter sales," President and CEO Scott Rowe said in the release.

The guidance assumes tariff rates in place as of Oct. 1 and "increasingly challenging conditions in the Middle East," which the company said have been affected by armed conflict and geopolitical instability. Flowserve now expects total sales growth of 2% to 3%, versus about 3% before, and cut its capital spending estimate to about $90 million from about $100 million.

Orders and backlog climb

Demand itself looked healthy. Third-quarter bookings rose 14% to $1.38 billion, or 8% organically. Aftermarket bookings reached a record $728 million, up 11.4%, while original equipment bookings climbed 17.1% to $655.8 million.

Backlog grew 20% from a year earlier to $3.5 billion, the largest in the company's history.

Rowe said the backlog growth and healthy underlying demand reinforce the company's confidence in delivering mid-single-digit organic sales compound annual growth through 2030.

Margins expand

Reported sales rose 5.4% to $1.24 billion, helped by acquisitions, though organic sales slipped 1.2%.

Operating margin widened 580 basis points to 12.5%, and adjusted operating margin rose 170 basis points to 16.5%. Rowe credited the Flowserve Business System, the company's operating playbook, for "translating solid market demand into bookings growth and stronger profitability."

Adjusted EPS rose 18.9% to $1.07 from $0.90. Reported EPS fell to $0.81 from $1.67, with the year-earlier quarter including $256.2 million of other income. Net earnings attributable to Flowserve were $103.0 million, compared with $219.6 million.

The latest quarter included a $16.2 million gain on the sale of a business, which the company said related to the divestiture of its PMV Automation business, along with realignment charges.

Cash flow

Cash from operations fell to $144.1 million from $401.8 million a year earlier. Year to date, operating cash flow was $230.3 million, compared with $506.1 million.

For the first nine months, adjusted EPS rose 13.4% to $2.87, while reported sales dipped 0.9% to $3.48 billion.

Flowserve will hold a conference call on Thursday morning to discuss the results.

Sources

1. Flowserve Form 8-K with third-quarter 2026 earnings release (Exhibit 99.1), filed Oct. 28, 2026 (accession 0001193125-26-436189)

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