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Crane Co. Q3 Earnings Lag - Analyst Blog

By: Zacks.com
Posted: 10/29/2013 12:10:00 PM
Referenced Stocks: CMHHY;CR;MARUY;TYC

Crane Co. ( CR ), a diversified machinery company, reported adjusted earnings per share of $1.04 for the third quarter 2013. This represents an increase of 5.0% over the year-ago quarter but three cents decline from the Zacks Consensus Estimate of $1.07 per share.

Revenue

Crane Co. net sales in the quarter decreased 1.3% year over year and came in at $637.5 million. The decrease was due to 1% fall in core sales and roughly 0.3% negative impact  from foreign currency translation.

Total order backlog in the quarter was $773.5 million, up 0.2% year over year.

Crane Co. generates revenue under four heads, which are briefly discussed below:

Revenue from the Aerospace & Electronics segment came in at $169.8 million, down 0.9% year over year, Merchandising Systems revenue fell 9.6% to $83.6 million and Fluid Handling revenue was at $322.2 million, down 0.9%. The revenue fall was arrested partially by 8.8% increase in Engineered Materials revenue that came in at $62.0 million.

Margins

Cost of goods sold of Crane Co. in the third quarter 2013 decreased 0.9% year over year and as a percentage of revenue was at 66.1%, up 30 basis points year over year. Gross margin in the quarter was 33.9%. SG&A expenses, as a percentage of revenue, was 20.0%, against 20.6% in the year-ago quarter.

Crane Co's adjusted operating margin from continuing operations expanded 80 basis points year over year to 14.4% in the quarter. Adjusted EBITDA was $109.4 million versus $104.9 million in the year-ago quarter while margin in the quarter stood at 17.2%.

Balance Sheet/ Cash Flow

Exiting the third quarter of 2013, cash and cash equivalents of Crane Co. stood at $403.4 million versus $420.9 million in the previous quarter. Long-term debt was at $199.2 million, down compared with $399.2 million in the previous quarter.

Crane Co's cash flow from operating activities was $80.5 million, up 27.4% from $63.2 million in the year-ago comparable quarter. Capital spending in the quarter was $7.0 million, up 13.2% year over year.

In the quarter, Crane Co. paid dividend totalling $17.4 million and repaid $200.0 million long-term debts. Also, along with the results, the company announced that quarterly dividend of 30 cents will be paid on Dec 10, 2013 to shareholders of record as on Nov 29, 2013.   

Outlook

For 2013, management of Crane Co. anticipates adjusted earnings per share to be within $4.10-$4.20 range versus $4.10-$4.25 expected earlier due to lower-than-expected revenue growth. Free cash flow is anticipated to be within $190-$210 million range as against $190-$220 million expected earlier.

Crane Co. currently has a market capitalization of $3.6 billion. The stock currently holds Zacks Rank #4 (Sell). Other companies to look out for are Marubeni Corporation ( MARUY ) with a Zacks Rank #1 (Strong Buy) while Tyco International Ltd. ( TYC ) and China Merchants Holdings (International) Company Limited ( CMHHY ) , each come with a Zacks Rank #2 (Buy).



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CRANE CO (CR): Free Stock Analysis Report

MARUBENI CORP (MARUY): Get Free Report

TYCO INTL LTD (TYC): Free Stock Analysis Report

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