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Crane Holdings posts Q3 2022 losses, misses analyst estimates

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October 26, 2022

Crane Holdings Co. suffered sales and earnings declines for Q3 2022, partially due to the costs associated with the May 22 divestiture of Crane Supply, according to an earnings release. Highlights include:

• Third quarter 2022 sales fell 9%, from $894 million in Q3 2021 to $815 million in the quarter ending Sept. 30, 2022. Core sales growth of $17 million, or 2%, was more than offset by a $60 million, or 7%, divestiture impact, and a $36 million, or 4%, impact from an unfavorable foreign exchange.
• Core year-over-year order growth of 10% in the third quarter was more than offset by a 6% divestiture impact and a 5% impact from an unfavorable foreign exchange.
• Net earnings fell from $116.6 million to a $59.3 million loss in the comparative quarters.
• Adjusted net income per share fell from $1.98 to $1.86, with the decline driven by a 19-cent impact from the reversion to a more normal tax rate compared to the 15.3% tax rate in the third quarter of last year, and the expected 16-cent year-over-year impact from the May 2022 divestiture of Crane Supply.
• Earnings per diluted share fell from $1.96 to a $1.06 loss.
• Payment and merchandising technologies sales fell 8% from $366 million to $335 million, driven by a 6%, impact from an unfavorable foreign exchange and a 3% decline in core sales. Operating profit margin increased to a record 25.9%, from 22.9% last year, primarily reflecting strong pricing and productivity, partially offset by lower volumes.
• Engineered materials sales rose 4%, from $60 million to $63 million.
• Aerospace and electronics sales fell 1%, from $169 million to $167 million.
• Process flow technologies sales fell 16%, from $299 million to $250 million.

Shares traded today at $98.71 against a 52-week range of $82.14-$114.87.

The $815 million in quarterly revenue missed expectations by $1.62 million, while the non-GAAP EPS of a $1.06 loss missed expectations by $2.87, according to Seeking Alpha.

"We delivered another quarter of very strong results with clear evidence of our execution in adjusted operating margins of 17.6%," Max Mitchell, president and CEO, said in the press release. "We also saw continued momentum across industrial end markets, with core order growth up 10% and core backlog growth of 26%. End market demand remains robust, but our core sales growth of 2% reflects the supply chain constraints that continue to impact everyone in our key markets."

The company adjusted the midpoint of its full year 2022 GAAP EPS guidance primarily to reflect the third quarter after-tax charges of $2.83 per share related to the entity sale transaction, and it narrowed the range to $6.58-$6.72 from the prior range of $9.80-$10.20.