), a diversified machinery company, reported adjusted earnings
per share of $1.05 for first-quarter 2014, up 1% year over year
and in line with the Zacks Consensus Estimate.
CRANE CO (CR): Free Stock Analysis Report
FED SIGNAL CP (FSS): Free Stock Analysis
ICAHN ENTERPRIS (IEP): Get Free Report
NOBLE GROUP LTD (NOBGY): Get Free Report
To read this article on Zacks.com click here.
Crane generated net sales of $716.8 million in first-quarter
2014, reflecting an increase of 14.2% year over year. The
improvement can be attributed to a 1.0% core sales increase and a
13.4% contribution from acquisitions, offset partially by a 0.2%
negative foreign currency translation impact.
However, the top-line result lagged the Zacks Consensus Estimate
of $734 million.
Total order backlog at the end of first-quarter 2014 was $823.7
million, up 8.1% sequentially.
Crane generates revenues under four heads, results of which are
briefly discussed below.
Revenues from the Aerospace & Electronics segment increased
2.5% year over year to $169.0 million. Order backlog at the end
of the quarter was $397.5 million, up 10% sequentially.
The Payment & Merchandising Systems segment generated
revenues of $169.1 million, up 89.0% year over year. Oder backlog
was $58.8 million, up from $51.9 million at the end of the
The Engineered Materials segment's revenues in the quarter were
$67.9 million, up 12.8% year over year. The segment recorded
13.4% sequential increase in its order backlog, settling at $16.6
Revenues from the Fluid Handling segment decreased 0.7% year over
year to $310.8 million. Order backlog was $350.7 million, up 5.1%
Crane's cost of goods sold in first-quarter 2014 increased 11.7%
year over year and, as a percentage of revenue, it was 63.9%,
down 140 basis points (bps) year over year. Gross margin in the
quarter was 36.1%. Selling, general and administrative (SG&A)
expenses, as a percentage of revenue, were 22.0% versus 20.4% in
the year-ago quarter.
Adjusted operating margin from continuing operations contracted
20 bps year over year to 14.1% in the quarter.
Balance Sheet/ Cash Flow
Exiting first-quarter 2014, Crane had cash and cash equivalents
of $250.3 million, down from $270.6 million at the end of the
previous quarter. Long-term debt increased sequentially to $749.2
Crane, in first-quarter 2014, used $18.9 million of cash for its
operating activities, lower than $20.4 million used in the
year-ago quarter. Capital expenditure, however, increased 71.6%
year over year to $9.4 million. Cash dividends paid in the
quarter amounted to $17.6 million, up from $16.1 million in the
comparable quarter a year ago.
Concurrent with the earnings release, Crane also announced that
its board of directors has approved payment of a quarterly cash
dividend of 30 cents on Jun 10, 2014 to shareholders of record as
of May 30.
For 2014, Crane reiterated its earnings per share guidance in the
$4.55−$4.75 range. The prediction excludes 22 cents of
integration costs and 5 cents of costs related to facility
repositioning actions. Accounting for these one-time expenses,
the company's Generally Accepted Accounting principles (GAAP)
earnings per share are expected in the $4.28−$4.48
Sales are predicted to be roughly $3.0 billion, including the
impact of the MEI Conlux Holdings acquisition (completed in Dec
2013) and core sales growth of 1−3%. Free cash flow is
anticipated to be within $225−$250 million.
Crane currently has a market capitalization of $4.1 billion and
holds a Zacks Rank #3 (Hold). Some better-ranked stocks in the
Icahn Enterprises, L.P.
Federal Signal Corp.
Noble Group Limited
), all of which carry a Zacks Rank #1 (Strong Buy).