Crane co. reports second quarter results and raises 2018 eps guidance
Stamford, conn.--(business wire)--crane co. (nyse: cr), a diversified manufacturer of highly engineered industrial products, reported second quarter 2018 earnings per diluted share (eps) of $1.32, compared to $1.14 per diluted share in the second quarter of 2017. excluding special items, second quarter 2018 eps increased 20% to $1.41. (please see the attached non-gaap financial measures tables.) second quarter sales were a record $851 million, an increase of 21% compared to $703 million in the second quarter of 2017. the sales increase was comprised of a $124 million, or 18%, benefit from acquisitions, core sales growth of $12 million, or 2%, and a $12 million, or 2%, benefit from favorable foreign exchange. operating profit in the second quarter was $113 million, an increase of 7% compared to $106 million in the second quarter of 2017. excluding special items, operating profit in the second quarter was $126 million, an increase of 13% compared to $112 million in the second quarter of 2017. (please see the attached non-gaap financial measures tables.) the effective tax rate in the second quarter was 23.1%, down from 30.5% in the second quarter of 2017. excluding special items, the effective tax rate in the second quarter was 23.9%, down from 30.4% in the second quarter of 2017. the lower tax rate in the second quarter of 2018 was a result of the 2017 tax cuts and jobs act. we continue to expect a full year 2018 tax rate of approximately 22%. max mitchell, crane co. president and chief executive officer commented: "we delivered another quarter of strong operating results. most major end markets are performing as or better than expected, with solid demand across aerospace & electronics, crane payment innovations, crane currency and fluid handling. we are also making continued progress across our various initiatives including previously announced repositioning activities and the integration of crane currency. to date, we are tracking ahead of the midpoint of our previously issued guidance, with incremental strength at aerospace & electronics and continued shipments to a large crane currency customer more than offsetting softer rv demand. based on these factors, we are raising our 2018 eps guidance, excluding special items, to $5.60-$5.80, from our prior range of $5.45-$5.65." (please see the attached non-gaap financial measures tables.) cash flow and other financial metrics cash provided by operating activities in the first six months of 2018 was $131 million, compared to $70 million in the first six months of 2017. free cash flow (cash provided by operating activities less capital spending) was $87 million in the first six months of 2018, compared to $50 million in the first six months of 2017. (please see the attached non-gaap financial measures tables.) the company's cash position was $318 million at june 30, 2018, compared to $706 million at december 31, 2017. total debt was $1,109 million at june 30, 2018, compared to $743 million at december 31, 2017. the increase in total debt reflects the financing associated with the january 10, 2018 acquisition of crane currency. segment results all comparisons detailed in this section refer to operating results for the second quarter 2018 versus the second quarter 2017. fluid handling second quarter change 2018 2017 — — sales increased $13 million, driven by $8 million, or 3%, of favorable foreign exchange, $4 million, or 2%, core growth, and a slight benefit from acquisitions. operating margin decreased to 10.7%, compared to 11.0% last year, primarily reflecting adverse mix related to the timing of nuclear outages. excluding special items, operating margin was 12.3%, compared to 12.8% last year. fluid handling order backlog was $292 million at june 30, 2018, $262 million at december 31, 2017, and $259 million at june 30, 2017. payment & merchandising technologies second quarter change sales increased $126 million, or 64%, driven primarily by sales from acquisitions, with $3 million of favorable foreign exchange and approximately flat core sales on challenging comparisons to the prior year. operating margin declined to 14.2%, from 21.1% last year, primarily reflecting the impact of the crane currency acquisition, and restructuring and integration related charges. excluding special items, operating margins of 16.5% declined from 21.8% last year. aerospace & electronics second quarter change 2018 2017 sales increased $16 million, or 9%, primarily driven by higher core sales. operating margin increased to 23.1%, from 22.0% last year, primarily as a result of higher volumes and productivity. excluding special items, operating margin increased 110 basis points to 23.3%. aerospace & electronics order backlog was $441 million at june 30, 2018, $374 million at december 31, 2017, and $328 million at june 30, 2017. engineered materials second quarter change 2018 2017 17.9 sales decreased $7 million, or 10%, driven primarily by lower sales to the recreational vehicle market. operating margin declined to 17.9%, primarily reflecting lower volumes, partially offset by strong productivity. raising 2018 guidance we are raising our 2018 full year gaap eps guidance to a range of $4.90-$5.10, compared to the prior range of $4.75-$4.95. we now expect 2018 full year eps, excluding special items, of $5.60-$5.80, compared to the prior range of $5.45-$5.65. full year 2018 free cash flow (cash provided by operating activities less capital spending) is now expected to be in a range of $250-$280 million, compared to the prior range of $240-$270 million. (please see the attached non-gaap financial measures tables.) additional information additional information with respect to the company’s asbestos liability and related accounting provisions and cash requirements is set forth in the current report on form 8-k filed with a copy of this press release. conference call crane co. has scheduled a conference call to discuss the second quarter financial results on tuesday, july 24, 2018 at 10:00 a.m. (eastern). all interested parties may listen to a live webcast of the call at http://www.craneco.com. an archived webcast will also be available to replay this conference call directly from the company’s website under investors, events & presentations. slides that accompany the conference call will be available on the company’s website. crane co. is a diversified manufacturer of highly engineered industrial products. founded in 1855, crane co. provides products and solutions to customers in the chemicals, oil & gas, power, automated payment solutions, banknote design and production and aerospace & defense, along with a wide range of general industrial and consumer related end markets. the company has four business segments: fluid handling, payment & merchandising technologies, aerospace & electronics and engineered materials. crane co. has approximately 12,000 employees in the americas, europe, the middle east, asia and australia. crane co. is traded on the new york stock exchange (nyse:cr). for more information, visit www.craneco.com. this press release may contain forward-looking statements as defined by the private securities litigation reform act of 1995. these statements are based on the management’s current beliefs, expectations, plans, assumptions and objectives regarding crane co.’s future financial performance and are subject to significant risks and uncertainties. any discussions contained in this press release, except to the extent that they contain historical facts, are forward-looking and accordingly involve estimates, assumptions, judgments and uncertainties. there are a number of factors that could cause actual results or outcomes to differ materially from those addressed in these forward-looking statements. such factors are detailed in the company’s annual report on form 10-k for the fiscal year ended december 31, 2017, the quarterly report on form 10-q for the quarter ended march 31, 2018, and subsequent reports filed with the securities and exchange commission. such reports are available on the securities exchange commission’s website (www.sec.gov). crane co. does not undertake to update any forward-looking statements. (financial tables follow) crane co. income statement data (in millions, except per share data) supplemental data: crane co. condensed balance sheets (in millions) june 30, crane co. condensed statements of cash flows (in millions) june 30, $ 149.4 $ 132.3 total (used for) provided by financing activities (decrease) increase in cash and cash equivalents crane co. order backlog (in millions) june 30, march 31, june 30, 1,096.6 crane co. non-gaap financial measures (in millions, except per share data) percentchangejune 30,2018 percentchangejune 30,2018 threemonths sixmonths income items special items impacting operating profit: special items impacting net income attributable to common shareholders: special items impacting provision for income taxes segment information: fluidhandling payment &merchandisingtechnologies aerospace&electronics engineeredmaterials totalcompany net sales 17.9 segment information: fluidhandling payment &merchandisingtechnologies aerospace&electronics engineeredmaterials totalcompany * represents the impact from the change in presentation of net periodic pension and postretirement benefit costs. crane co. guidance (in millions, except per share data) cash provided by operating activities before asbestos-related payments
