Shares of Flowserve (FLS -3.47%) jumped more than 8% on Friday after the fluid motion and control products maker reported first-quarter earnings that came in ahead of expectations thanks to improving margins.
Flowserve posted first-quarter adjusted earnings of $0.41 per share, beating the $0.34-per-share analyst consensus, despite revenue coming in at $890.1 million, well shy of the $944 million analysts had expected. Sales were down 3.3% year over year, or up 0.4% on a constant currency basis, and included a 1% negative impact from a divestiture.
The results suggest that Flowserve is doing a good job of extracting costs from its operations. The company reported gross and operating margins of 33% and 10.2% in the quarter, up 350 and 530 basis points year over year, respectively.
Total bookings in the quarter were $1.07 billion, up 14.9%, giving the company a total backlog as of March 31 of $2.1 billion, which was up 9.2% over year-end.
Its shares had a difficult run late in 2018 as concerns over a global slowdown cutting into international industrial growth weighed on investors. Flowserve reaffirmed its full-year 2019 earnings outlook, though, for $1.95 to $2.15 per share, and said it expects revenue to increase 4% to 6% year over year.
The real takeaway for investors is that the company's push to transform itself by cutting costs, realigning operations, and focusing on what are expected to be higher-growth products seems to be having the desired effect.