Premium provider of fluid motion & control products and services, Flowserve Corp. FLS recently inked a global preferred supplier agreement with environmental management services provider, Veolia Group. Flowserve believes this agreement will bolster its competitive position in the water resources and related industries by improving the quality of its products and services.
Per the agreement, Flowserve will act as a preferred supplier of deep-well submersible pumps, clear-water single & multistage pumps, and associated services for Veolia. The agreement will span through 2018. This recent contract win highlights Flowserve's reliability as well as its ability to successfully execute projects and offer flawless services to clients throughout the world.
Veolia is a well known provider of environmental management services ranging from water treatment and distribution to sanitation. The company has a strong geographical foothold in Europe, particularly France and certain other markets which it classifies under Rest of the world and Global Businesses. The company's vast and varied customer base, including public authorities, industrial and service sector clients, bodes well for the expansion of its water management services, going forward.
Apart from a diversified portfolio, we believe Flowserve's strong prospects in the U.S. chemical market, investment opportunities in oil & gas sector in the Middle East and selected Asian markets, and solar power projects in Africa and North America shows future promise. This apart, the "One Flowserve" culture, focused on top-line growth through disciplined strategic prioritization and investment process as well as cost-saving initiatives will act as a primary growth driver in the long run.
Despite long-term growth potential, sluggish oil & gas markets and strong currency headwinds have proved to be major drags on the company's financials. Moreover, operational uncertainties in several regions across the globe have lowered bookings, and can further hurt this Zacks Rank #4 (Sell) stock's revenues and backlog tally in the near future.