Crane co. reports third quarter results and raises full-year guidance
Stamford, conn.--(business wire)--crane co. (nyse: cr), a diversified manufacturer of highly engineered industrial products, reported third quarter 2017 earnings of $1.13 per diluted share, compared to $1.07 per share in the third quarter of 2016. third quarter 2017 sales were $696 million, up slightly compared to $694 million in 2016. core sales declined $10 million, or 1.5%, approximately offset by a $7 million net acquisition benefit and $5 million of favorable foreign exchange. operating profit in the third quarter was $105 million, up 2% compared to $104 million in the third quarter of 2016. excluding special items, operating profit was $106 million in the third quarter of 2017, up 2% compared to the third quarter of 2016. (please see the attached non-gaap financial measures tables.) the effective tax rate in the third quarter was 29.4% compared to 33.0% last year. excluding special items, the effective tax rate in the third quarter of 2017 was 29.5%, down from 33.0% last year. (please see the attached non-gaap financial measures tables.) cash provided by operating activities for the nine months ended september 30, 2017 was $174 million, compared to $168 million for the nine months ended september 30, 2016. the company's cash and debt positions were $572 million and $746 million, respectively, at september 30, 2017, compared to $510 million and $745 million, respectively, at december 31, 2016. the company completed $25 million of share repurchases during the third quarter. max mitchell, crane co. president and chief executive officer, stated: "we delivered another solid quarter. end market demand remains in line with our expectations, and we benefited in the quarter from continued execution on our growth and productivity initiatives, as well as a lower tax rate. with only one quarter left in 2017 and based on our performance to date, we are raising our adjusted eps guidance range to $4.45-$4.55." segment resultsall comparisons detailed in this section refer to operating results for the third quarter 2017 versus the third quarter 2016. fluid handling sales increased $22 million, driven by $9 million, or 4%, core growth, an $8 million, or 3%, contribution from an acquisition, and $5 million, or 2%, of favorable foreign exchange. operating margin declined to 12.2%, compared to 12.5% last year, primarily reflecting unfavorable mix and m&a related costs. excluding special items, operating margin was 12.4% in the quarter. fluid handling order backlog was $269 million at september 30, 2017, compared to $228 million at december 31, 2016, and $242 million at september 30, 2016. payment & merchandising technologies sales increased $2 million, or 1%, driven by $3 million, or 2%, of core growth, partially offset by slightly unfavorable foreign exchange and a small net acquisition/divestiture impact. operating margin expanded 340 basis points to 22.0%, driven primarily by productivity, higher core sales, and favorable mix. aerospace & electronics sales decreased $26 million, or 13%, primarily as a result of unfavorable comparisons related to shipments for a large military program in the third quarter of 2016. operating margins increased 60 basis points to 20.2% driven by productivity and improved mix, partially offset by the lower volumes. aerospace & electronics order backlog was $348 million at september 30, 2017, compared to $328 million at june 30, 2017, $353 million at december 31, 2016, and $377 million at september 30, 2016. engineered materials sales increased $4 million, or 7%, driven primarily by higher sales to the recreational vehicle market. operating margin increased 10 basis points to 17.8%, as the higher volumes and productivity were approximately offset by higher material costs and unfavorable mix. raising 2017 earnings guidancewe now expect gaap earnings for full-year 2017 to be in a range of $4.41-$4.51 per diluted share, compared to our prior guidance range of $4.31-$4.51. excluding special items, we now expect earnings of $4.45-$4.55 per diluted share, compared to our prior guidance range of $4.35-$4.55. (please see the attached non-gaap financial measures tables.) additional informationadditional 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 callcrane co. has scheduled a conference call to discuss the third quarter financial results on tuesday, october 24, 2017 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, 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 11,000 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, 2016 and subsequent reports filed with the securities and exchange commission. (cr-e) (financial tables follow) crane co. income statement data (in millions, except per share data) supplemental data: crane co. condensed balance sheets (in millions) september 30,2017 december 31,2016 crane co. condensed statements of cash flows (in millions) three months endedseptember 30, nine months endedseptember 30, crane co. order backlog (in millions) september 30,2017 june 30,2017 march 31,2017 december 31,2016 september 30,2016 * includes $3.5 million and $4.1 million as of september 30, 2017 and june 30, 2017, respectively, of backlog pertaining to the westlock business acquired in april 2017.** includes $0.2 million and $0.3 million as of september 30, 2017 and june 30, 2017, respectively, of backlog pertaining to the microtronics business acquired in june 2017. crane co. non-gaap financial measures (in millions, except per share data) three months endedseptember 30, nine months endedseptember 30, percentchangeseptember 30,2017 percentchangeseptember 30,2017 nine months income items special items impacting operating profit: special items impacting net income attributable to common shareholders: net income attributable to common shareholdersbefore special items special items impacting provision for income taxes segment information: for the three months ended september 30, 2017 fluidhandling payment &merchandisingtechnologies aerospace&electronics engineeredmaterials totalcompany 0.0 segment information: fluidhandling payment &merchandisingtechnologies aerospace&electronics engineeredmaterials corporate totalcompany crane co. guidance (in millions, except per share data) three months endedseptember 30, nine months endedseptember 30, 2017 full yearguidance cash flow items
