Crane Co Q4 Earnings Climb Payment And Vending Sales Rise 445 To 1772 Million

STAMFORD, CT -- Crane Co. reported fourth-quarter 2014 earnings of 95¢ per diluted share, compared with 84¢ a share in the fourth quarter of 2013.

Fourth-quarter 2014 results included special items of $11 million in after-tax charges, or 18¢ a share. Fourth-quarter 2013 results included special items of $11.9 million in after tax charges, or 20¢ per diluted share. Excluding these special items in both years, fourth quarter 2014 earnings per diluted share increased 9% to $1.13, compared with $1.04 in the fourth quarter of 2013.

Special items in the fourth quarter of 2014 consisted of several after-tax charges, including $4.6 million, or 8¢ a share, of integration-related charges associated with Crane's December 2013 acquisition of MEI. Special items in the fourth quarter of 2013 included net costs of $11.9 million, or 20¢ a share, related to the MEI purchase.

Crane Co.'s Payment & Merchandising Technologies segment, which comprises Crane Payment Innovations and Crane Merchandising Systems, had fourth-quarter sales of $177.2 million, compared with $122.7 million in the same period of 2013. The 44.5% increase over 2013 fourth quarter sales was driven primarily by $71 million of sales related to the MEI transaction, partially offset by a core sales decline of $9.8 million, or 8%, and an unfavorable foreign exchange of $6.7 million, or 5.5%.

Adjusted operating profit increased to $24.3 million, primarily reflecting the impact of the MEI acquisition, and adjusted operating margins expanded 250 basis points to 13.7%, driven primarily by integration synergies and the mix benefit of the MEI acquisition.

Crane Co.'s other industrial segments include Fluid Handling, Aerospace & Electronics and Engineered Materials. Companywide, fourth quarter 2014 sales were $730.7 million, an increase of 7.2% over $681.4 in the fourth quarter of 2013.

Operating profit in the fourth quarter increased to $89.6 million, up 7.8%, compared with the fourth quarter of 2013.

Full year 2014 earnings per diluted share were $3.23, compared with $3.73 in 2013.

Total sales in 2014 were $2.92 billion, an increase of 12.7% from 2013. Operating profit for the full year 2014 was $316.3 million, compared with $347.9 million in 2013.

"Our fourth quarter results were in line with our most recent guidance," said Crane Co. president and chief executive Max Mitchell. "Our adjusted full-year operating margin was strong at 14.6%, reflecting solid execution and strong productivity in a challenging growth environment. I am pleased with our progress on a number of fronts, most notably with the integration of MEI, where we exceeded our 20¢ EPS accretion target. In addition, we secured several important new program wins at Aerospace & Electronics, and drove strong operating margin expansion at Fluid Handling, reaching 15.6%, excluding special items, reflecting a 50 basis point improvement over last year."

He added that global growth was a challenge for Crane throughout the year and that the company expects the "difficult revenue environment" to persist into 2015, driven by declines in its Fluid Handling business.

"This challenge will be exacerbated by unfavorable foreign exchange and higher pension expense. In response, we have initiated incremental repositioning actions at Fluid Handling and identified additional synergy opportunities related to the MEI acquisition. Reflecting our confidence in our longer-term outlook, we repurchased $50 million of Crane shares during the fourth quarter. Considering these factors, we expect earnings per diluted share, excluding special items, in a range of flat to up 5% compared to 2014," Mitchell concluded.

Sales for 2015 are expected to be approximately $2.85 billion, and earnings are projected to be in a range of $4.45-$4.65 per diluted share. Additional guidance details will be provided at the company's investor conference on Feb. 26.

Click here to download Crane Co.'s full fourth-quarter news release, income statement data and consolidated balance sheets.