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Why Is Crane (CR) Up 9.1% Since Last Earnings Report?
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It has been about a month since the last earnings report for Crane (CR - Free Report) . Shares have added about 9.1% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to its next earnings release, or is Crane due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Crane's Q2 Earnings and Revenues Beat, '18 View Up
Crane reported better-than-expected results in the second quarter of 2018.Adjusted earnings for the quarter came in at $1.41 per share, surpassing the Zacks Consensus Estimate of $1.35. Also, the bottom line increased 20.5% from the year-ago tally of $1.17.
The company's revenues totaled $851 million, up 21.1% year over year. Also, the reported figure beat the Zacks Consensus Estimate of $837 million. The improvement was driven by 18% benefit from acquired assets, 2% gain from favorable foreign currency movements and 2% increase in core sales.
At the quarter end, total order backlog was $1,096.6 million, up an impressive 59.2% year over year.
Segmental Details
Crane generates revenues from its four segments, which are briefly discussed below.
Revenues from Aerospace & Electronics totaled $187.2 million, up 9.4% year over year. It represented 22% of second-quarter revenues. Order backlog was $441 million, up 34.5%.
Payment & Merchandising Technologies generated revenues of $324.3 million, up 63.6% year over year. It represented 38.1% of second-quarter revenues. Order backlog was $350.5 million (including backlog related to the acquired Crane Currency business) compared with $87 million in the prior-year quarter.
Engineered Materials' revenues were $62.6 million, down 9.8% year over year. It represented 7.4% of second-quarter revenues. Order backlog at the segment decreased 11.4% from the year-ago quarter to $13.2 million.
Revenues from Fluid Handling increased 5% year over year to $276.9 million. It represented 32.5% of second-quarter revenues. Order backlog was $291.6 million, up 12.6%.
Costs
In the reported quarter, Crane's cost of goods sold increased 22.8% year over year. The same metric, as a percentage of revenues, came in at 64.1% compared with 63.2% in the prior-year quarter. Selling, general and administrative expenses, as a percentage of revenues, were 21.9% compared with 21.4% in the year-ago quarter.
Balance Sheet and Cash Flow
As of Jun 30, 2018, Crane's cash and cash equivalents were $318.2 million compared with $509.3 million in the year-ago quarter. Long-term debt increased to $937.1 million from $494.1 million as of Dec 31, 2017.
In the quarter, the company's net cash generated from operating activities totaled $57.3 million compared with $66.9 million in the year-ago quarter. Free cash flow was $40.8 million in the same period. Dividend paid in the quarter was approximately $20.9 million.
Concurrent with the earnings release, Crane announced that its board of directors has approved the payment of a quarterly dividend of 35 cents to shareholders for third-quarter 2018. The dividend will be paid on Sep 10, 2018.
Outlook
For 2018, Crane anticipates earnings, excluding special items, to be within the $5.60-$5.80 per share range compared with $5.45-$5.65 guided earlier. GAAP earnings are estimated to be in the band of $4.90-$5.10 compared with the earlier guidance of $4.75-$4.95 per share.
Free cash flow is projected to lie within the $250-$280 million range compared with $240-$270 million anticipated earlier.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
VGM Scores
Currently, Crane has an average Growth Score of C, a grade with the same score on the momentum front. The stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is more suitable for value investors than those looking for growth and momentum.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Crane has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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Why Is Crane (CR) Up 9.1% Since Last Earnings Report?
It has been about a month since the last earnings report for Crane (CR - Free Report) . Shares have added about 9.1% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to its next earnings release, or is Crane due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Crane's Q2 Earnings and Revenues Beat, '18 View Up
Crane reported better-than-expected results in the second quarter of 2018.Adjusted earnings for the quarter came in at $1.41 per share, surpassing the Zacks Consensus Estimate of $1.35. Also, the bottom line increased 20.5% from the year-ago tally of $1.17.
The company's revenues totaled $851 million, up 21.1% year over year. Also, the reported figure beat the Zacks Consensus Estimate of $837 million. The improvement was driven by 18% benefit from acquired assets, 2% gain from favorable foreign currency movements and 2% increase in core sales.
At the quarter end, total order backlog was $1,096.6 million, up an impressive 59.2% year over year.
Segmental Details
Crane generates revenues from its four segments, which are briefly discussed below.
Revenues from Aerospace & Electronics totaled $187.2 million, up 9.4% year over year. It represented 22% of second-quarter revenues. Order backlog was $441 million, up 34.5%.
Payment & Merchandising Technologies generated revenues of $324.3 million, up 63.6% year over year. It represented 38.1% of second-quarter revenues. Order backlog was $350.5 million (including backlog related to the acquired Crane Currency business) compared with $87 million in the prior-year quarter.
Engineered Materials' revenues were $62.6 million, down 9.8% year over year. It represented 7.4% of second-quarter revenues. Order backlog at the segment decreased 11.4% from the year-ago quarter to $13.2 million.
Revenues from Fluid Handling increased 5% year over year to $276.9 million. It represented 32.5% of second-quarter revenues. Order backlog was $291.6 million, up 12.6%.
Costs
In the reported quarter, Crane's cost of goods sold increased 22.8% year over year. The same metric, as a percentage of revenues, came in at 64.1% compared with 63.2% in the prior-year quarter. Selling, general and administrative expenses, as a percentage of revenues, were 21.9% compared with 21.4% in the year-ago quarter.
Balance Sheet and Cash Flow
As of Jun 30, 2018, Crane's cash and cash equivalents were $318.2 million compared with $509.3 million in the year-ago quarter. Long-term debt increased to $937.1 million from $494.1 million as of Dec 31, 2017.
In the quarter, the company's net cash generated from operating activities totaled $57.3 million compared with $66.9 million in the year-ago quarter. Free cash flow was $40.8 million in the same period. Dividend paid in the quarter was approximately $20.9 million.
Concurrent with the earnings release, Crane announced that its board of directors has approved the payment of a quarterly dividend of 35 cents to shareholders for third-quarter 2018. The dividend will be paid on Sep 10, 2018.
Outlook
For 2018, Crane anticipates earnings, excluding special items, to be within the $5.60-$5.80 per share range compared with $5.45-$5.65 guided earlier. GAAP earnings are estimated to be in the band of $4.90-$5.10 compared with the earlier guidance of $4.75-$4.95 per share.
Free cash flow is projected to lie within the $250-$280 million range compared with $240-$270 million anticipated earlier.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
VGM Scores
Currently, Crane has an average Growth Score of C, a grade with the same score on the momentum front. The stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is more suitable for value investors than those looking for growth and momentum.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Crane has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.