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Crane Holdings (CR) Up 1.3% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for Crane Holdings (CR - Free Report) . Shares have added about 1.3% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Crane Holdings due for a pullback? 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 catalysts.
Crane Holdings’ Q4 Earnings Surpass Estimates, Revenues Miss
Crane Holdings reported mixed results for fourth-quarter 2022. CR’s earnings beat the Zacks Consensus Estimate by 12.7%, whereas sales missed the same by 0.2%.
Adjusted earnings came in at $2.13 per share, surpassing the Zacks Consensus Estimate of $1.89. The bottom line increased 70.4% from the year-ago quarter’s figure of $1.25.
Revenue Details
Crane Holdings’ net sales were $824 million in the quarter, a slight decline compared to the $825 million reported in the year-ago quarter.
The quarterly net sales missed the Zacks Consensus Estimate of $826 million.
Crane Holdings reports net sales under four segments: Process Flow Technologies, Payment & Merchandising Technologies, Aerospace & Electronics and Engineered Materials (presented as continuing operations as of Jun 30, 2022).
The segmental information is briefly discussed below:
Revenues from Process Flow Technologies (representing 30.6% of the quarter’s total revenues) were $252 million, declining 16% from the year-ago quarter. Movement in foreign currencies had an adverse impact of 5% on sales. The divestiture of Crane Supply impacted segmental revenues by 19%. The segment’s order backlog was $369 million in the reported quarter, reflecting sequential growth of 4.2%.
Revenues from Payment & Merchandising Technologies (representing 41% of the quarter’s total revenues) totaled $338 million, increasing 8% year over year on a 14% increase in core sales. Foreign currency movement had an adverse impact of 6% on segmental revenues. The order backlog at the end of the reported quarter was $566 million, up 13.2% sequentially.
Revenues from the Aerospace & Electronics segment (representing 22% of the quarter’s total revenues) were $181 million, up 15% year over year. The order backlog at the end of the quarter was $613 million, up 3.5% sequentially.
Revenues from the Engineered Materials segment (representing 6.4% of the quarter’s total revenues) were $52 million, decreasing 4% year over year.
Margin Profile
In the fourth quarter, Crane Holdings’ sales cost of $487.7 million reflected a 7.4% decline from the year-ago quarter. The metric represented 59.2% of net sales compared with 63.9% a year ago. Selling, general and administrative expenses increased 1% to $207.1 million. The same represented 25.1% of net sales compared with 24.8% in the year-ago quarter.
Adjusted operating profit in the fourth quarter increased 54.1% year over year to $153 million, while the margin increased 660 basis points to 18.6%. Interest expenses in the reported quarter were $16.2 million, increasing 48.6% from the year-ago figure.
Balance Sheet and Cash Flow
While exiting 2022, Crane Holdings had cash and cash equivalents of $657.6 million, up 37.4% from $478.6 million at the end of 2021. The long-term debt balance was $543.7 million compared with $842.7 million at the end of 2021.
In 2022, Crane Holdings made no repayment of commercial paper (maturity >90 days).
In the same period, CR used net cash of $151.6 million for operating activities against $498.5 million generated in the year-ago period. Capital expenditure was $58.4 million in the period, higher than the $53.9 million spent in the previous year. Free cash flow was $210 million in 2022 against the $444.6 million free cash flow generated in the year-ago period.
Shareholder-Friendly Policy
In fourth-quarter 2022, Crane Holdings used $26.4 million for paying out dividends, up 5.2% from the year-ago quarter’s level. The company did not make any share reacquisition in the quarter.
2023 Outlook
The separation of Crane Company and Crane NXT is expected to be completed in April 2023. So, the first quarter will be reported on a Crane Holdings, Co. consolidated basis. Guidance items for 2023 are provided on post-separation basis.
The Company expects its pro forma Crane Company EPS of $3.40-$3.70 per share. It anticipates annualized post-separation corporate costs of $65 million in 2023. Non operating expense is expected to be $16 million for the year.
The post-separation adjusted tax rate is anticipated to be 23% in 2023. The company anticipates diluted shares of 57.3 million for 2023. Average free cash flow conversion is expected to be 90 after adjusting for separation-related cash items.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -9.53% due to these changes.
VGM Scores
Currently, Crane Holdings has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. However, 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 C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, Crane Holdings 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 Holdings (CR) Up 1.3% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Crane Holdings (CR - Free Report) . Shares have added about 1.3% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Crane Holdings due for a pullback? 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 catalysts.
Crane Holdings’ Q4 Earnings Surpass Estimates, Revenues Miss
Crane Holdings reported mixed results for fourth-quarter 2022. CR’s earnings beat the Zacks Consensus Estimate by 12.7%, whereas sales missed the same by 0.2%.
Adjusted earnings came in at $2.13 per share, surpassing the Zacks Consensus Estimate of $1.89. The bottom line increased 70.4% from the year-ago quarter’s figure of $1.25.
Revenue Details
Crane Holdings’ net sales were $824 million in the quarter, a slight decline compared to the $825 million reported in the year-ago quarter.
The quarterly net sales missed the Zacks Consensus Estimate of $826 million.
Crane Holdings reports net sales under four segments: Process Flow Technologies, Payment & Merchandising Technologies, Aerospace & Electronics and Engineered Materials (presented as continuing operations as of Jun 30, 2022).
The segmental information is briefly discussed below:
Revenues from Process Flow Technologies (representing 30.6% of the quarter’s total revenues) were $252 million, declining 16% from the year-ago quarter. Movement in foreign currencies had an adverse impact of 5% on sales. The divestiture of Crane Supply impacted segmental revenues by 19%. The segment’s order backlog was $369 million in the reported quarter, reflecting sequential growth of 4.2%.
Revenues from Payment & Merchandising Technologies (representing 41% of the quarter’s total revenues) totaled $338 million, increasing 8% year over year on a 14% increase in core sales. Foreign currency movement had an adverse impact of 6% on segmental revenues. The order backlog at the end of the reported quarter was $566 million, up 13.2% sequentially.
Revenues from the Aerospace & Electronics segment (representing 22% of the quarter’s total revenues) were $181 million, up 15% year over year. The order backlog at the end of the quarter was $613 million, up 3.5% sequentially.
Revenues from the Engineered Materials segment (representing 6.4% of the quarter’s total revenues) were $52 million, decreasing 4% year over year.
Margin Profile
In the fourth quarter, Crane Holdings’ sales cost of $487.7 million reflected a 7.4% decline from the year-ago quarter. The metric represented 59.2% of net sales compared with 63.9% a year ago. Selling, general and administrative expenses increased 1% to $207.1 million. The same represented 25.1% of net sales compared with 24.8% in the year-ago quarter.
Adjusted operating profit in the fourth quarter increased 54.1% year over year to $153 million, while the margin increased 660 basis points to 18.6%. Interest expenses in the reported quarter were $16.2 million, increasing 48.6% from the year-ago figure.
Balance Sheet and Cash Flow
While exiting 2022, Crane Holdings had cash and cash equivalents of $657.6 million, up 37.4% from $478.6 million at the end of 2021. The long-term debt balance was $543.7 million compared with $842.7 million at the end of 2021.
In 2022, Crane Holdings made no repayment of commercial paper (maturity >90 days).
In the same period, CR used net cash of $151.6 million for operating activities against $498.5 million generated in the year-ago period. Capital expenditure was $58.4 million in the period, higher than the $53.9 million spent in the previous year. Free cash flow was $210 million in 2022 against the $444.6 million free cash flow generated in the year-ago period.
Shareholder-Friendly Policy
In fourth-quarter 2022, Crane Holdings used $26.4 million for paying out dividends, up 5.2% from the year-ago quarter’s level. The company did not make any share reacquisition in the quarter.
2023 Outlook
The separation of Crane Company and Crane NXT is expected to be completed in April 2023. So, the first quarter will be reported on a Crane Holdings, Co. consolidated basis. Guidance items for 2023 are provided on post-separation basis.
The Company expects its pro forma Crane Company EPS of $3.40-$3.70 per share. It anticipates annualized post-separation corporate costs of $65 million in 2023. Non operating expense is expected to be $16 million for the year.
The post-separation adjusted tax rate is anticipated to be 23% in 2023. The company anticipates diluted shares of 57.3 million for 2023. Average free cash flow conversion is expected to be 90 after adjusting for separation-related cash items.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -9.53% due to these changes.
VGM Scores
Currently, Crane Holdings has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. However, 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 C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, Crane Holdings has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.