Crane Co. (CR - Free Report) reported weaker-than-expected fourth-quarter 2020 results. Its earnings and sales missed the Zacks Consensus Estimate by 8.3% and 2.8%, respectively.
Adjusted earnings in the reported quarter were $1.00 per share, missing the consensus estimate of $1.09. On a year-over-year basis, the bottom line declined 36.7% from $1.58 due to lower sales.
In 2020, the company’s adjusted earnings came in at $3.84, down 36.2% year-over-year.
Revenues
In the quarter under review, Crane’s net sales were $726.4 million, reflecting a decline of 13.4% from the year-ago quarter. Results were adversely impacted by a fall in core sales of $178 million, largely due to the coronavirus outbreak-led issues, partially offset by foreign exchange of $12 million, and a benefit of $55 million from acquisitions.
Crane’s net sales lagged the Zacks Consensus Estimate of $747 million.
In 2020, the company’s net sales were $2,936.9 million, down 10.5% on a year-over-year basis.
The company reports net sales under four segments — Fluid Handling, Payment & Merchandising Technologies, Aerospace & Electronics, and Engineered Materials. The segmental information is briefly discussed below:
Revenues from the Fluid Handling were $258 million, down 7% from the year-ago quarter. Results reflected a 14% decline in core sales, partially offset by benefits of 2% from foreign exchange and 5% from acquisitions. The segment’s order backlog was $313.4 million in the reported quarter, reflecting a sequential increase of 2.7%.
Revenues from Payment & Merchandising Technologies totaled $283 million, decreasing 10% year over year. Results were hurt by core sales decline of 25%, partially offset by a 13% benefit from acquisitions and 2% from foreign exchange. Order backlog at the end of the quarter was $347.6 million, up 28.7% sequentially.
Revenues from the Aerospace & Electronics were $143 million, declining 29% year over year. The fall was mainly attributable to a decline in core sales. Order backlog at the end of the quarter was $491.2 million, down 1.4% sequentially.
Revenues from the Engineered Materials declined 2% year over year to $43 million on lower sales to building products market. However, it was partially offset by higher sales to recreational vehicle customers. Order backlog at the end of the quarter was $12.8 million, up 15.3% sequentially.
Margin Profile
In the fourth quarter, Crane’s cost of sales decreased 38.2% year over year to $491.1 million. It represented 67.6% of net sales compared with 94.9% in the year-ago quarter. Selling, general and administrative expenses dipped 1.1% to $176.4 million. It represented 24.3% of net sales compared with 21.3% a year ago.
Operating income in the fourth quarter was $59 million against an operating loss of $135 million recorded in the year-ago-quarter. Notably, operating margin in the quarter was 8.1%.
Balance Sheet and Cash Flow
Exiting the fourth quarter, Crane had cash and cash equivalents of $551 million, up 1.2% from $544.6 million at the end of the last reported quarter. Long-term debt balance was marginally up sequentially to $842.9 million.
In 2020, the company generated net cash of $309.5 million from operating activities compared with $393.9 million in the previous year. Capital expenditure in the year was $34.1 million, down 50.4%.
In the fourth quarter, free cash flow was $88 million compared with $205 million in the year-ago quarter. In the fourth quarter, Crane used $25 million for paying dividends, whereas it distributed $23.1 million a year ago.
Outlook
For 2021, the company currently anticipates adjusted earnings per share of $4.90-$5.10. Sales are predicted to be about $3.05 billion, suggesting year-over-year core sales growth of about 2%. Free cash flow is projected to be $260-$290 million for the year.
Zacks Rank & Stocks to Consider
The company currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks are AGCO Corporation (AGCO - Free Report) , AptarGroup, Inc. (ATR - Free Report) and Axon Enterprise, Inc. . While AGCO currently sports a Zacks Rank #1 (Strong Buy), AptarGroup and Axon Enterprise carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
AGCO delivered a positive earnings surprise of 434.48%, on average, in the trailing four quarters.
AptarGroup delivered a positive earnings surprise of 10.91%, on average, in the trailing four quarters.
Axon Enterprise delivered a positive earnings surprise of 30.28%, on average, in the trailing four quarters.
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Crane Co. (CR - Free Report) reported weaker-than-expected fourth-quarter 2020 results. Its earnings and sales missed the Zacks Consensus Estimate by 8.3% and 2.8%, respectively.
Adjusted earnings in the reported quarter were $1.00 per share, missing the consensus estimate of $1.09. On a year-over-year basis, the bottom line declined 36.7% from $1.58 due to lower sales.
In 2020, the company’s adjusted earnings came in at $3.84, down 36.2% year-over-year.
Revenues
In the quarter under review, Crane’s net sales were $726.4 million, reflecting a decline of 13.4% from the year-ago quarter. Results were adversely impacted by a fall in core sales of $178 million, largely due to the coronavirus outbreak-led issues, partially offset by foreign exchange of $12 million, and a benefit of $55 million from acquisitions.
Crane’s net sales lagged the Zacks Consensus Estimate of $747 million.
In 2020, the company’s net sales were $2,936.9 million, down 10.5% on a year-over-year basis.
The company reports net sales under four segments — Fluid Handling, Payment & Merchandising Technologies, Aerospace & Electronics, and Engineered Materials. The segmental information is briefly discussed below:
Revenues from the Fluid Handling were $258 million, down 7% from the year-ago quarter. Results reflected a 14% decline in core sales, partially offset by benefits of 2% from foreign exchange and 5% from acquisitions. The segment’s order backlog was $313.4 million in the reported quarter, reflecting a sequential increase of 2.7%.
Revenues from Payment & Merchandising Technologies totaled $283 million, decreasing 10% year over year. Results were hurt by core sales decline of 25%, partially offset by a 13% benefit from acquisitions and 2% from foreign exchange. Order backlog at the end of the quarter was $347.6 million, up 28.7% sequentially.
Revenues from the Aerospace & Electronics were $143 million, declining 29% year over year. The fall was mainly attributable to a decline in core sales. Order backlog at the end of the quarter was $491.2 million, down 1.4% sequentially.
Revenues from the Engineered Materials declined 2% year over year to $43 million on lower sales to building products market. However, it was partially offset by higher sales to recreational vehicle customers. Order backlog at the end of the quarter was $12.8 million, up 15.3% sequentially.
Margin Profile
In the fourth quarter, Crane’s cost of sales decreased 38.2% year over year to $491.1 million. It represented 67.6% of net sales compared with 94.9% in the year-ago quarter. Selling, general and administrative expenses dipped 1.1% to $176.4 million. It represented 24.3% of net sales compared with 21.3% a year ago.
Operating income in the fourth quarter was $59 million against an operating loss of $135 million recorded in the year-ago-quarter. Notably, operating margin in the quarter was 8.1%.
Balance Sheet and Cash Flow
Exiting the fourth quarter, Crane had cash and cash equivalents of $551 million, up 1.2% from $544.6 million at the end of the last reported quarter. Long-term debt balance was marginally up sequentially to $842.9 million.
In 2020, the company generated net cash of $309.5 million from operating activities compared with $393.9 million in the previous year. Capital expenditure in the year was $34.1 million, down 50.4%.
In the fourth quarter, free cash flow was $88 million compared with $205 million in the year-ago quarter. In the fourth quarter, Crane used $25 million for paying dividends, whereas it distributed $23.1 million a year ago.
Outlook
For 2021, the company currently anticipates adjusted earnings per share of $4.90-$5.10. Sales are predicted to be about $3.05 billion, suggesting year-over-year core sales growth of about 2%. Free cash flow is projected to be $260-$290 million for the year.
Zacks Rank & Stocks to Consider
The company currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks are AGCO Corporation (AGCO - Free Report) , AptarGroup, Inc. (ATR - Free Report) and Axon Enterprise, Inc. . While AGCO currently sports a Zacks Rank #1 (Strong Buy), AptarGroup and Axon Enterprise carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
AGCO delivered a positive earnings surprise of 434.48%, on average, in the trailing four quarters.
AptarGroup delivered a positive earnings surprise of 10.91%, on average, in the trailing four quarters.
Axon Enterprise delivered a positive earnings surprise of 30.28%, on average, in the trailing four quarters.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.4% per year.
These 7 were selected because of their superior potential for immediate breakout.
See these time-sensitive tickers now >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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