Flowserve Corporation (NYSE: FLS) saw its stock surge 5.87% in after-hours trading on Tuesday following the release of its third-quarter 2025 earnings report and announcement of strategic moves. The industrial pumps maker delivered a strong performance that exceeded analyst expectations on the bottom line, while also raising its full-year outlook and divesting legacy asbestos liabilities.

The company reported quarterly adjusted earnings of $0.90 per share, surpassing the analyst consensus estimate of $0.80 by 13.07%. This represents a significant 45.16% increase from the same period last year. Although sales of $1.174 billion missed estimates slightly, they still showed a 3.62% year-over-year growth. In response to the solid results, Flowserve raised its full-year 2025 adjusted EPS guidance to $3.40-$3.50 from the previous $3.25-$3.40 range.

Adding to investor optimism, Flowserve announced the divestiture of its legacy asbestos liabilities through the sale of its BW/IP - New Mexico, Inc. subsidiary to an affiliate of Acorn Investment Partners. This strategic move is expected to improve annual free cash flow by approximately $15 million to $20 million and enhance the company's flexibility for future growth opportunities. The transaction, set to close in Q4 2025, will result in a one-time estimated loss of about $135 million but is viewed positively for its long-term benefits.