On July 29, 2024, Crane Co (CR, Financial) released its 8-K filing for the second quarter of 2024, showcasing a strong performance that surpassed analyst expectations. Crane Co, a diversified industrial firm, manufactures a broad range of products, including valves, pumps, aerospace components, and fiberglass-reinforced plastic panels. The company operates through three segments: aerospace and electronics, process flow technologies, and engineered materials.
Performance Overview
Crane Co reported earnings per diluted share (EPS) of $1.23, a significant 64% increase from the same period last year, and adjusted EPS of $1.30, up 18%. This performance met the analyst estimate of $1.23 per share. The company also reported sales of $581 million, a 14% increase driven by 9% core sales growth, surpassing the estimated revenue of $568.29 million.
Financial Achievements
Crane Co's operating profit for the quarter was $97 million, a 53% increase from the previous year, with an adjusted operating profit of $103 million, up 22%. The operating profit margin improved to 16.6%, and the adjusted operating profit margin rose to 17.7%. These achievements highlight the company's effective cost management and productivity improvements.
Segment Performance
The Aerospace & Electronics segment reported net sales of $231 million, a 22% increase, driven by 16% core sales growth and a 6% contribution from acquisitions. The segment's operating profit margin increased to 22.8%, with an adjusted operating profit margin of 23.8%.
The Process Flow Technologies segment saw net sales of $298 million, a 13% increase, with 7% core sales growth and a 7% benefit from acquisitions. The segment's operating profit margin expanded to 20.0%, with an adjusted operating profit margin of 20.5%.
The Engineered Materials segment experienced an 8% decline in net sales to $53 million. The segment's operating profit margin decreased to 13.9%, primarily due to lower volumes.
Key Financial Metrics
| Metric | Q2 2024 | Q2 2023 | Change |
|---|---|---|---|
| Net Sales | $581 million | $510 million | 14% |
| Operating Profit | $97 million | $63 million | 53% |
| Adjusted Operating Profit | $103 million | $84 million | 22% |
| Operating Profit Margin | 16.6% | 12.4% | 420 bps |
| Adjusted Operating Profit Margin | 17.7% | 16.5% | 120 bps |
Cash Flow and Balance Sheet
During the second quarter, Crane Co generated $62 million in cash from operating activities, with capital expenditures amounting to $7 million, resulting in a free cash flow of $55 million. The company's cash balance stood at $229 million, with total debt of $377 million.
"We ended the quarter with a strong balance sheet and leverage remains low, providing us with significant capital deployment optionality," stated Rich Maue, Crane's Executive Vice President and Chief Financial Officer.
Updated Full-Year Outlook
Crane Co has raised the midpoint of its full-year adjusted EPS guidance by $0.15, now expecting a range of $4.95 to $5.15, up from the previous range of $4.75 to $5.05. The company anticipates total sales growth of approximately 11%, driven by core sales growth of 5% to 7% and an acquisition benefit of around 5%.
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Explore the complete 8-K earnings release (here) from Crane Co for further details.
