Crane Q2 Adj. Profit Beats View, Cuts Top-end Of Outlook Range; Hikes Dividend

(RTTNews) - Industrial products maker Crane Co. (CR) on Monday reported a 12 percent decline in profit for the second quarter on slightly lower sales and acquisition-related transaction costs. However, adjusted earnings per share beat analysts' expectations, while revenues missed their estimates.

Looking ahead, the company lowered the top-end of its fiscal 2013 earnings outlook range, but raised its quarterly dividend by 7 percent.

Segment wise, aerospace & electronics sales for the second quarter declined 3 percent from the year-ago period to $172.39 million and merchandising systems sales decreased 13 percent to $84.83 million. Meanwhile, engineered materials sales increased 6 percent to $57.75 million and fluid handling sales rose 2 percent to $333.78 million.

The company's operating margins expanded 200 basis points to a record 14.8 percent, led by solid execution in its fluid handling segment and strong productivity across the company.

Crane's second-quarter net income was $54.87 million or $0.93 per share, down from $62.56 million or $1.07 per share in the year-ago period.

The latest quarter's results include transaction costs of $7.3 million or $0.13 per share related to the pending acquisition of MEI Conlux Holdings. The prior-year quarter's results included a gain of $0.31 per share associated with divestitures, partially offset by $0.20 per share of repositioning charges.

Excluding these costs, adjusted earnings for the quarter were $62.19 million or $1.06 per share, compared to $56.17 million or $0.96 per share in the year-ago quarter. On average, eight analysts polled by Thomson Reuters expected the company to report earnings of $1.04 per share for the quarter. Analysts' estimates typically exclude special items.

Total net sales for the quarter declined 1 percent to $648.75 million from $657.69 million in the same period last year. Analysts had a consensus revenue estimate of $664.47 million for the quarter.

The decline in sales resulted from a core sales decline of $5.9 million, or 0.9 percent, and unfavourable foreign exchange of $3.0 million, or 0.5 percent.

Crane's backlog at the end of the quarter was $792.71 million, down from $811.64 million in the same period last year.

Looking ahead to fiscal 2013, Crane now expects adjusted earnings in a range of $4.10 to $4.25 per share, compared to its previous guidance range of $4.10 to $4.30 per share, citing lower than anticipated revenue growth. Analysts currently expect the company to report earnings of $4.23 per share for the year.

Further, the company's board of directors declared a 7 percent increase in its quarterly dividend to $0.30 per share from $0.28 per share. The dividend is payable on September 10, 2013 to shareholders of record as of the close of business on August 30, 2013.

Crane said it is in talks with Bain Capital and Advantage Partners, the representatives of the owners of MEI, concerning the economic effects related to remedies required by the European Commission involving two Crane Payment Systems product lines.

CR closed Monday's trading at $64.05, up $0.07 or 0.11 percent on a volume of 304,904 shares.