Crane co. reports first quarter results and raises 2018 eps guidance
Stamford, conn.--(business wire)--crane co. (nyse: cr), a diversified manufacturer of highly engineered industrial products, reported first quarter 2018 earnings per diluted share (eps) of $1.13, compared to $1.05 per diluted share in the first quarter of 2017. excluding special items, first quarter 2018 eps increased 25% to $1.31. (please see the attached non-gaap financial measures tables.) first quarter sales were a record $799 million, an increase of 19% compared to $673 million in the first quarter of 2017. the sales increase was comprised of a $103 million, or 15%, benefit from acquisitions, and a $28 million, or 4%, benefit from favorable foreign exchange, partially offset by a core sales decline of $5 million, or 1%. operating profit in the first quarter was $94 million, up slightly compared to $93 million in the first quarter of 2017. excluding special items, operating profit in the first quarter was $112 million, an increase of 16% compared to $97 million in the first quarter of 2017. (please see the attached non-gaap financial measures tables.) the effective tax rate in the first quarter was 18.6%, down from 28.1% in the first quarter of 2017. excluding special items, the effective tax rate in the first quarter was 18.9%. the lower tax rate in the first quarter of 2018 was a result of the 2017 tax cuts and jobs act. max mitchell, crane co. president and chief executive officer commented: "on the heels of record results last year, we are off to a solid start in 2018. at fluid handling, end markets continue to gradually improve, and we are executing well and gaining market share. core margins improved at payment & merchandising technologies, and sales were in-line with our expectations on challenging comparisons. aerospace & electronics also started the year strong, with growth across the segment driving good operating leverage. overall, we are tracking modestly ahead of the midpoint of our previously issued guidance, and we continue to pursue opportunities that could provide further upside." mr. mitchell continued, "beyond the core business, our repositioning activities and the crane currency acquisition integration are progressing as expected, and we are making good progress on our growth initiatives. we are pleased with our results year-to-date and we remain excited about our multi-year earnings growth outlook, although our optimism is tempered somewhat by heightened uncertainty related to the global trade environment. balancing these factors, we are raising our 2018 eps guidance, excluding special items, to $5.45-$5.65, from our prior range of $5.35-$5.55." (please see the attached non-gaap financial measures tables.) cash flow and other financial metrics cash provided by operating activities in the first quarter of 2018 was $74 million, compared to $4 million in the first quarter of 2017. free cash flow (cash provided by operating activities less capital spending) was $47 million in the first quarter of 2018, compared to a use of ($6) million in the first quarter of 2017. (please see the attached non-gaap financial measures tables.) the company's cash position was $642 million at march 31, 2018, compared to $706 million at december 31, 2017. total debt was $1,411 million at march 31, 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 first quarter 2018 versus the first quarter 2017. fluid handling sales increased $27 million, driven by $14 million, or 6%, of favorable foreign exchange, $7 million, or 3%, core growth, and a $6 million, or 2.5%, contribution from acquisitions. operating margin increased to 10.5%, compared to 10.2% last year, primarily reflecting leverage on higher volumes and productivity, partially offset by unfavorable mix. excluding special items, operating margin was 12.1%, compared to 11.3% last year. fluid handling order backlog was $281 million at march 31, 2018, $262 million at december 31, 2017, and $250 million at march 31, 2017. payment & merchandising technologies sales increased $97 million, or 50%, driven by sales from acquisitions, with $13 million of favorable foreign exchange offsetting a $13 million decline in core sales. the decline in core sales was primarily a result of extraordinarily challenging comparisons to the prior year, with core sales up 18% in the first quarter of 2017. operating margin declined to 12.5%, from 19.6% last year, reflecting the impact of the crane currency acquisition, restructuring and integration related charges, and the impact of lower volumes. excluding special items, operating margins of 16.8% declined from 20.0% last year. aerospace & electronics sales increased $7 million, or 4%, primarily driven by $7 million of higher core sales with a slight benefit from favorable foreign exchange. operating margin increased to 20.1%, from 19.4% last year, primarily as a result of higher volumes and productivity. excluding special items, operating margin increased 70 basis points to 20.3%. aerospace & electronics order backlog was $381 million at march 31, 2018, $374 million at december 31, 2017, and $352 million at march 31, 2017. engineered materials sales decreased $5 million, or 7%, driven primarily by lower sales to the recreational vehicle market. operating margin declined 90 basis points to 17.8%, 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 $4.75-$4.95, compared to the prior range of $4.65-$4.85. we now expect 2018 full year eps, excluding special items, of $5.45-$5.65, compared to the prior range of $5.35-$5.55. full year 2018 free cash flow (cash provided by operating activities less capital spending) is now expected to be in a range of $240-$270 million, compared to the prior range of $220-$250 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 first quarter financial results on tuesday, april 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. 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 provides products and solutions to customers in the hydrocarbon processing, petrochemical, chemical, power generation, unattended payment, banknote design and production, automated merchandising, aerospace, electronics, transportation and other markets. the company has four business segments: fluid handling, payment & merchandising technologies, aerospace & electronics and engineered materials. crane 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 present management’s expectations, beliefs, plans and objectives regarding future financial performance, and assumptions or judgments concerning such performance. 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 the 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 and subsequent reports filed with the securities and exchange commission. (financial tables follow) (in millions, except per share data) supplemental data: (in millions) 2018 2017 (in millions) march 31, (in millions) 2018 2017 march 31,2017 (in millions, except per share data) percentchangemarch 31,2018 threemonths 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 segment information: fluidhandling payment &merchandisingtechnologies aerospace&electronics engineeredmaterials totalcompany (in millions, except per share data) three months endedmarch 31, 2018 full year guidance cash provided by operating activities before asbestos-related payments
