Crane Q3 Profit Down 51%, Results Miss View; Lowers 2014 Outlook

(RTTNews) - Industrial products maker Crane Co. (CR) on Monday reported a 51 percent decline in profit for the third quarter from last year, as double-digit revenue growth was more than offset by higher one-time charges.

Both revenue and adjusted earnings per share for the quarter missed analysts' expectations. Looking ahead, the company lowered its financial outlook for fiscal 2014, also below Street estimates.

Max Mitchell, president and chief executive officer of Crane Co. said, "While overall margins were strong, third quarter results fell short of our expectations primarily as a result of lower core sales in our Fluid Handling business."

Crane's third-quarter net income attributable to common shareholders was $28.08 million or $0.47 per share, down from $57.13 million or $0.97 per share in the year-ago period.

The latest quarter's results comprise special items of $38.7 million in after-tax charges, or $0.65 per share, including an update to projected remediation costs for certain legacy environmental liabilities of $0.61 per share. The year-ago period's results included special items of $4.1 million in after-tax charges, or $0.07 per share.

Excluding items, adjusted net earnings for the quarter were $1.12 per share, compared to $1.04 per share in the year-ago period. On average, three analysts polled by Thomson Reuters expected the company to earn $1.17 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter climbed 14 percent to $727.41 million from $637.52 million in the prior year. Analysts had a consensus revenue estimate of $769.68 million.

The higher sales resulted from a core sales increase of $1.6 million or 0.3 percent, sales from acquisitions, net of divestitures, of $86.2 million, or 13.5 percent, and favorable foreign exchange of $2.1 million, or 0.3 percent.

Segment wise, fluid handling sales declined 2.4 percent to $314.46 million and aerospace & electronics sales declined 1.5 percent from the year-ago period to $167.16 million. Meanwhile, payment and merchandising technologies more than doubled to $181.06 million and engineered materials sales grew 4.5 percent to $64.74 million.

Crane's total backlog at the end of the quarter was $827.69 million, up from $773.50 million in the same period last year.

Looking ahead to fiscal 2014, Crane lowered its outlook for reported net earnings to a range of $3.43 to $3.53 per share from the prior range of $4.18 to $4.38 per share. The revised outlook reflects change to adjusted earnings guidance as well as $0.61 per share related to the environmental provision recorded during the third quarter.

The company also lowered its outlook for fiscal 2014 adjusted earnings to a range of $4.40 to $4.50 per share from the prior range of $4.55 to $4.75 per share, and now projects full-year sales of about $2.95 billion, compared to the prior outlook for sales of about $3 billion. Analysts expect earnings of $4.62 per share for the year on revenues of $3.03 billion.

In a separate statement, Crane said its board of directors declared a quarterly dividend of $0.33 per share for the fourth quarter of 2014. The dividend is payable on December 9, 2014 to shareholders of record as of the close of business on November 28, 2014.

CR closed Monday's trading at $61.24, down $0.06 or 0.10 percent on a volume of 476,954 shares.