Flowserve's Multi-Million-Dollar Order

Zacks Equity Research

Flowserve Corporation (FLS) received a multi-million-dollar order contract last week from IDE technologies to supply pumping systems for the seawater reverse osmosis (:SWRO) desalination plant located in Carlsbad, CA.

The order is expected to complete by the fourth quarter of 2015, after which this project will be the largest desalination plant in North America. The plant has a capacity of processing 189,250 cubic meters of water a day (50 million gallons/day).

This contract further emphasizes the fact that worldwide demand for potable water is increasing continuously; therefore municipalities and industries are turning increasingly to desalination. Flowserve has been assisting the set up and maintenance of desalination plants across the world for almost 50 years now. Thus, given the number of years of expertise, the company is capable in providing the right combination of technical expertise, and products and services to support the desalination industry.

Based in Israel, IDE technologies is the world leader in global thermal and membrane desalination industry, especially the mega-sized seawater reverse osmosis (:SWRO) industry. The plants set up by IDE technologies are not only cost effective but are also eco-friendly. IDE technologies have been selected to design and operate the Carlsbad desalination plant for 30 years.

The order was booked in the third quarter of 2013. Flowserve’s Engineered Product division that primarily caters to the pumps and pump systems, mechanical seals, auxiliary systems and replacement parts and related services, reported revenue growth of 14.8% year over year in third quarter 2013. The increase was driven by a strong increase in original equipment sales.

Flowserve currently has a Zacks Rank #2 (Buy). Other players in the same industry that are worth a look include Electronic for Imaging Inc. (EFII), Xylem Inc. (XYL) and Parker-Hannifin Corp. (PH). While Electronic for Imaging and Xylem carry a Zacks Rank #1 (Strong Buy), Parker-Hannifin has a Zacks Rank # 2 (Buy).

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