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Crane (CR) Tops Q3 Earnings & Revenues, Raises Guidance

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Crane Co. (CR - Free Report) reported better-than-expected results for third-quarter 2017. The company noted that this stellar performance stemmed from its growth and productivity initiatives as well as lower tax rate.

Earnings/Revenues

Quarterly adjusted earnings came in at $1.13 per share, comfortably surpassing the Zacks Consensus Estimate of $1.09. The bottom line came in higher than the year-ago tally of $1.07 per share.

Net sales during the quarter came in at $695.9 million, handily beating the Zacks Consensus Estimate of $683 million. Also, the top line came in higher than the year-ago figure of $694.2 million. The upside was primarily driven by acquisition benefits and favorable foreign-exchange translation impact.  

Segmental Details

Revenues of Fluid Handling segment came in at $266.9 million in the reported quarter, up 8.9% year over year. Core sales of the segment was up 4% year over year.

Aggregate revenues from the Payment & Merchandising Technologies segment were $188.6 million, up 1% year over year. Core sales of the segment was up 2% year over year.

Engineered Materials segment’s net sales during the quarter came in at $68.4 million, increasing 6.5% year over year. The upswing was driven by strong demand from the Recreational Vehicle market.

However, the Aerospace & Electronics segment’s revenues came in at $172 million, dropping 13.2% year over year. The downside was witnessed due to unlikely comparisons related to the shipments of a massive military program.  

Crane Company Price, Consensus and EPS Surprise

 

Crane Company Price, Consensus and EPS Surprise | Crane Company Quote

Margins

Cost of sales in the reported quarter was $441.5 million, down from $449.1 million reported in the comparable period last year.

Selling, general and administrative expenses, as a percentage of revenues, came in at 21.3%, compared with 20.3% in the year-ago quarter. Operating margin in third-quarter 2017 was 15.1%, up 10 basis points year over year.

Balance Sheet/ Cash Flow

Exiting the third quarter, Crane’s cash and cash equivalents were $572.2 million, above $509.7 million recorded at the end of 2016. Long-term debt totaled $745.9 million, marginally above $745.3 million recorded on Dec 31, 2016.

In the third quarter, the company negated net cash worth $103.8 million from operating activities, down 11% year over year. Capital spending summed $13.5 million, up from $11.9 million spent in the year-ago quarter.

Concurrent with the earnings release, Crane announced that its board of directors has approved the payment of a quarterly dividend of 33 cents per share for fourth-quarter 2017. The dividend will be paid on Dec 8 to shareholders on record as of Nov 30, 2017.

Outlook

Crane raised the lower-end of its earnings guidance for 2017. Full-year 2017 earnings are anticipated to lie within the $4.45-$4.55 per share range, as against the prior projection of $4.35-$4.55 per share.

Stocks to Consider

Better-ranked stocks in the same space are listed below:

Bunzl PLC (BZLFY - Free Report) currently holds a Zacks Rank of 2 (Buy). The company’s earnings per share (EPS) is projected to be up 3.2% in the next three to five years. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Danaher Corporation (DHR - Free Report) also carries a Zacks Rank of 2. Over the next three to five years, the company’s EPS is projected to be up 11.7%.

Honeywell International Inc. (HON - Free Report) has a Zacks Rank of 2. The company’s EPS is estimated to improve 9.4% during the same time frame.

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