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Crane (CR) Down 1.1% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Crane (CR - Free Report) . Shares have lost about 1.1% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Crane due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Crane kept its earnings streak alive in the fourth quarter of 2021, with the fourth consecutive quarter of better-than-expected results. The quarterly earnings surpassed the Zacks Consensus Estimate by 11.61%. Sales surprise is 3.65%.
Adjusted earnings were $1.25 per share, surpassing the Zacks Consensus Estimate of $1.12. The bottom line expanded 35.9% from the year-ago quarter figure of 92 cents. Sales growth and margin expansion drove the quarterly performance.
For 2021, the company’s adjusted earnings were $6.55 per share, surpassing the Zacks Consensus Estimate of $6.42. Then again, the bottom line reflected an increase of 85.6% from the year-ago figure of $3.53.
The bottom line also came in above the company’s guidance of $6.35-$6.45 per share for the year.
Revenue Details
In the quarter, Crane’s net sales were $770.5 million, reflecting growth of 12.7% from the year-ago quarter. Results reflect the strength in the company’s core businesses.
The quarterly net sales surpassed the Zacks Consensus Estimate of $743.4 million.
The company reports net sales under three segments — Process Flow Technologies, Payment & Merchandising Technologies, and Aerospace & Electronics.
The segmental information is briefly discussed below:
Revenues from Process Flow Technologies (representing 38.8% of the quarter’s total revenues) were $298.7 million, reflecting growth of 15.9% from the year-ago quarter. The results benefited from a gain of 15% from organic sales and 1% from movements in foreign currencies. The segment’s order backlog was $357.9 million in the reported quarter, reflecting sequential growth of 1.8%.
Revenues from Payment & Merchandising Technologies (representing 40.7% of the quarter’s total revenues) totaled $313.7 million, increasing 11% year over year. Organic sales grew 11% from the year-ago quarter. The order backlog at the end of the reported quarter was $438 million, up 12.9% sequentially.
Revenues from the Aerospace & Electronics segment (representing 20.5% of the quarter’s total revenues) were $158.1 million, increasing 10.3% year over year. The order backlog at the end of the quarter was $459.8 million, down 3.9% sequentially.
For 2021, the company’s revenues totaled $3.18 billion, up 15.2% year over year. The top line surpassed the consensus estimate by 0.63% and came in above the management’s projection of $3.15 billion.
Margin Profile
In the fourth quarter, Crane’s cost of sales of $482.5 million reflected a 5.4% increase from the year-ago quarter. It represented 62.6% of net sales compared with 67% in the year-ago quarter. Selling, general and administrative expenses increased 16.8% to $200.9 million. It represented 26.1% of net sales compared with 25.2% in the year-ago quarter.
Adjusted operating income in the fourth quarter increased 33% year over year to $93.1 million, while margin expanded 190 basis points to 12.1%. Operating results gained from a favorable mix and higher volumes. Interest expenses, net, in the reported quarter were $10.9 million, down 21.6% year over year.
Balance Sheet and Cash Flow
Exiting the fourth quarter, Crane had cash and cash equivalents of $478.6 million, up 6.2% from $450.8 million at the end of the third quarter. The long-term debt balance was $842.4 million, a slight change from the previous quarter’s $842.2 million.
In 2021, the company made a $27.1-million repayment of commercial paper (maturity >90 days). Term loan repayments totaled $348.1 million.
In 2021, the company generated net cash of $466.7 million from operating activities, up 64.3% from the previous year. Capital expenditure was $51.7 million, higher than $32.9 million spent in 2020. Free cash flow increased 65.2% year over year to $415 million.
Notably, the year’s cash performances were better than Crane’s expectations of $400-$425 million for operating cash flow and $400-$425 million for free cash flow. Capital spending was below the company’s expectation of $60 million.
Shareholder-Friendly Policy
In 2021, Crane used $100.6 million for paying dividends, increasing 0.2% from the previous year. Share reacquisitions in the year amounted to $96.3 million, higher than $70 million in 2020. Exiting 2021, the company is left to repurchase $200 million worth of its shares.
Outlook
Confident of its growth opportunities, Crane projected a 10% year-over-year increase in its earnings for 2022. It also believes that strong cash generation will help fund organic investments, inorganic activities, and rewards for shareholders.
The company anticipates adjusted earnings per share of $7.00-$7.40 for the year. Sales are predicted to be $3.3 billion, with core sales growth of 4-6%. Movements in foreign currencies are expected to adversely impact the top line by 1.5%.
Corporate expenses for the year are expected to be $75 million and the adjusted tax rate will likely be 21%. The company expects operating cash flow of $410-$450 million and capital expenditure of $60 million for 2022. Free cash flow is projected to be $350-$390 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates review flatlined during the past month.
The consensus estimate has shifted -5.2% due to these changes.
VGM Scores
At this time, Crane has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Crane has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Crane (CR) Down 1.1% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Crane (CR - Free Report) . Shares have lost about 1.1% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Crane due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Crane Beats Q4 Earnings Estimates, Gives Promising View
Crane kept its earnings streak alive in the fourth quarter of 2021, with the fourth consecutive quarter of better-than-expected results. The quarterly earnings surpassed the Zacks Consensus Estimate by 11.61%. Sales surprise is 3.65%.
Adjusted earnings were $1.25 per share, surpassing the Zacks Consensus Estimate of $1.12. The bottom line expanded 35.9% from the year-ago quarter figure of 92 cents. Sales growth and margin expansion drove the quarterly performance.
For 2021, the company’s adjusted earnings were $6.55 per share, surpassing the Zacks Consensus Estimate of $6.42. Then again, the bottom line reflected an increase of 85.6% from the year-ago figure of $3.53.
The bottom line also came in above the company’s guidance of $6.35-$6.45 per share for the year.
Revenue Details
In the quarter, Crane’s net sales were $770.5 million, reflecting growth of 12.7% from the year-ago quarter. Results reflect the strength in the company’s core businesses.
The quarterly net sales surpassed the Zacks Consensus Estimate of $743.4 million.
The company reports net sales under three segments — Process Flow Technologies, Payment & Merchandising Technologies, and Aerospace & Electronics.
The segmental information is briefly discussed below:
Revenues from Process Flow Technologies (representing 38.8% of the quarter’s total revenues) were $298.7 million, reflecting growth of 15.9% from the year-ago quarter. The results benefited from a gain of 15% from organic sales and 1% from movements in foreign currencies. The segment’s order backlog was $357.9 million in the reported quarter, reflecting sequential growth of 1.8%.
Revenues from Payment & Merchandising Technologies (representing 40.7% of the quarter’s total revenues) totaled $313.7 million, increasing 11% year over year. Organic sales grew 11% from the year-ago quarter. The order backlog at the end of the reported quarter was $438 million, up 12.9% sequentially.
Revenues from the Aerospace & Electronics segment (representing 20.5% of the quarter’s total revenues) were $158.1 million, increasing 10.3% year over year. The order backlog at the end of the quarter was $459.8 million, down 3.9% sequentially.
For 2021, the company’s revenues totaled $3.18 billion, up 15.2% year over year. The top line surpassed the consensus estimate by 0.63% and came in above the management’s projection of $3.15 billion.
Margin Profile
In the fourth quarter, Crane’s cost of sales of $482.5 million reflected a 5.4% increase from the year-ago quarter. It represented 62.6% of net sales compared with 67% in the year-ago quarter. Selling, general and administrative expenses increased 16.8% to $200.9 million. It represented 26.1% of net sales compared with 25.2% in the year-ago quarter.
Adjusted operating income in the fourth quarter increased 33% year over year to $93.1 million, while margin expanded 190 basis points to 12.1%. Operating results gained from a favorable mix and higher volumes. Interest expenses, net, in the reported quarter were $10.9 million, down 21.6% year over year.
Balance Sheet and Cash Flow
Exiting the fourth quarter, Crane had cash and cash equivalents of $478.6 million, up 6.2% from $450.8 million at the end of the third quarter. The long-term debt balance was $842.4 million, a slight change from the previous quarter’s $842.2 million.
In 2021, the company made a $27.1-million repayment of commercial paper (maturity >90 days). Term loan repayments totaled $348.1 million.
In 2021, the company generated net cash of $466.7 million from operating activities, up 64.3% from the previous year. Capital expenditure was $51.7 million, higher than $32.9 million spent in 2020. Free cash flow increased 65.2% year over year to $415 million.
Notably, the year’s cash performances were better than Crane’s expectations of $400-$425 million for operating cash flow and $400-$425 million for free cash flow. Capital spending was below the company’s expectation of $60 million.
Shareholder-Friendly Policy
In 2021, Crane used $100.6 million for paying dividends, increasing 0.2% from the previous year. Share reacquisitions in the year amounted to $96.3 million, higher than $70 million in 2020. Exiting 2021, the company is left to repurchase $200 million worth of its shares.
Outlook
Confident of its growth opportunities, Crane projected a 10% year-over-year increase in its earnings for 2022. It also believes that strong cash generation will help fund organic investments, inorganic activities, and rewards for shareholders.
The company anticipates adjusted earnings per share of $7.00-$7.40 for the year. Sales are predicted to be $3.3 billion, with core sales growth of 4-6%. Movements in foreign currencies are expected to adversely impact the top line by 1.5%.
Corporate expenses for the year are expected to be $75 million and the adjusted tax rate will likely be 21%. The company expects operating cash flow of $410-$450 million and capital expenditure of $60 million for 2022. Free cash flow is projected to be $350-$390 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates review flatlined during the past month.
The consensus estimate has shifted -5.2% due to these changes.
VGM Scores
At this time, Crane has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Crane has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.