Crane Q2 Profit Up 9%, Cuts 2014 Reported Earnings Outlook; Hikes Dividend

(RTTNews) - Industrial products maker Crane Co. (CR) on Monday reported a 9 percent increase in profit for the second quarter from last year on double-digit revenue growth that helped offset higher one-time charges. However, adjusted earnings per share for the quarter missed analysts' expectations by a penny, while revenues beat their estimates.

Looking ahead, the company lowered its earnings outlook for fiscal 2014 on charges, but affirmed its adjusted earnings and revenue guidance. The company also increased its quarterly dividend by 10 percent.

Max Mitchell, president and chief executive officer of Crane Co. said, "We were encouraged by second quarter order activity and backlog growth, particularly at Fluid Handling, and we continue to expect stronger sales growth in the second half of 2014. We believe that we remain on track to achieve our 2014 objectives, and are reaffirming our previously issued 2014 full year guidance, excluding Special Items."

Crane's second-quarter net income attributable to common shareholders was $59.70 million or $1.00 per share, up from $54.87 million or $0.93 per share in the year-ago period.

The latest quarter's results included special items of $9.3 million in after-tax charges, or $0.15 per share. The year-ago period's results included special items of $7.3 million in after-tax charges, or $0.13 per share.

Excluding items, adjusted net earnings for the quarter were $1.15 per share, compared to $1.06 per share in the year-ago period. On average, four analysts polled by Thomson Reuters expected the company to earn $1.16 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter climbed 16 percent to $750.01 million from $648.75 million in the prior year. Analysts had a consensus revenue estimate of $746.03 million.

The higher sales resulted from a core sales increase of $0.6 million or 0.1 percent, sales from acquisitions, net of divestitures, of $93.8 million, or 14.5 percent, and favorable foreign exchange of $6.9 million, or 1.1 percent.

Segment wise, aerospace & electronics sales for the first quarter rose 3 percent from the year-ago period to $177.55 million, while payment and merchandising technologies more than doubled to $184.60 million. Engineered materials sales grew 10 percent to $63.42 million and fluid handling sales declined 2.8 percent to $324.51 million.

The company's operating margin for the quarter declined 70 basis points to 13.0 percent.

Crane's total backlog at the end of the quarter was $853.19 million, up from $792.71 million in the same period last year.

Looking ahead to fiscal 2014, Crane lowered its outlook for reported net earnings to a range of $4.18 to $4.38 per share from the prior range of $4.28 to $4.48 per share.

The revised outlook reflects previously disclosed special items, as well as a charge of $1.1 million after-tax, or $0.02 per share, related to the divestiture of a small business, and a charge of $4.2 million after-tax, or $0.07 per share, related to a lawsuit settlement.

However, the company maintained its outlook for fiscal 2014 adjusted earnings of $4.55 to $4.75 per share, and sales of $3 billion. Analysts expect earnings of $4.69 per share for the year on revenues of $3.04 billion.

In a separate statement, Crane said its board of directors declared a 10 percent increase in its quarterly dividend to $0.33 per share from $0.30 per share for the third quarter of 2014. The dividend is payable on September 9, 2014 to shareholders of record as of the close of business on August 29, 2014.

CR closed Monday's trading at $70.94, down $0.82 or 1.14 percent on a volume of 291,012 shares.