Crane Q1 Profit Declines, But Matches View; Reiterates 2014 Outlook

(RTTNews) - Industrial products maker Crane Co. (CR) on Monday reported a 16 percent decline in profit for the first quarter from last year as double-digit revenue growth was more than offset by higher one-time charges.

However, adjusted earnings per share for the quarter matched analysts' expectations, while revenues missed their estimates. Looking ahead, the company reiterated its financial outlook for fiscal 2014.

Crane's first-quarter net income attributable to common shareholders was $48.68 million or $0.82 per share, down from $57.79 million or $0.99 per share in the year-ago period.

The latest quarter's results included after-tax items of $9.2 million or $0.16 per share related to the recent acquisition of MEI, and after-tax charges of $4.3 million or $0.07 per share related to repositioning activities. The prior-year quarter's results included after-tax transaction costs of $2.9 million or $0.05 per share, related to the MEI acquisition.

Excluding items, adjusted net earnings for the quarter were $1.05 per share, compared to $1.04 per share in the year-ago period. On average, four analysts polled by Thomson Reuters projected earnings of $1.05 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter climbed 14 percent to $716.83 million from $627.57 million in the prior year. Analysts had a consensus revenue estimate of about $725.97 million.

The higher sales resulted from a core sales increase of $6.3 million or 1.0 percent, sales related to the MEI transaction of $84.1 million or 13.4 percent, and unfavorable foreign exchange of $1.2 million, or -0.2 percent.

Segment wise, aerospace & electronics sales for the first quarter rose 3 percent from the year-ago period to $168.96 million, while payment and merchandising technologies sales surged 89 percent to $169.09 million. Engineered materials sales grew 13 percent to $67.94 million and fluid handling sales edged down 0.7 percent to $310.84 million.

The company's operating margin for the quarter declined 240 basis points to 11.4 percent.

Crane's total backlog at the end of the quarter was $823.67 million, up from $800.29 million in the same period last year.

Looking ahead to fiscal 2014, Crane reiterated its outlook for net earnings of $4.28 to $4.48 per share, adjusted earnings of $4.55 to $4.75 per share, and sales of $3 billion. Analysts expect earnings of $4.70 per share on revenues of $3.04 billion.

The sales increase is expected to be driven by a core sales increase of 1 percent to 3 percent, and a 14 percent contribution from the MEI acquisition.

In a separate statement, Crane announced its regular quarterly dividend of $0.30 per share for the second quarter of 2014. The dividend is payable on June 10, 2014 to shareholders of record as of the close of business on May 30, 2014.

CR closed Monday's regular trading session at $70.24, up $0.44 or 0.63 percent on a volume of 409,876 shares.