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Category: Stock Market and Crane Co.
Date: 29 October 2019 Stock Price: $84.27 We take a look at the 3rd quarter earnings report of their 2019 fiscal year of Crane Co. a diversified manufacturer of highly engineered products that employs roughly 12 000 people
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About Crane Co.
Crane Co. is a diversified manufacturer of highly engineered industrial products. Founded in 1855, Crane Co. provides products and solutions to customers in the chemicals, oil & gas, power, automated payment solutions, banknote design and production and aerospace & defense markets, along with a wide range of general industrial and consumer related end markets. The Company has four business segments: Fluid Handling, Payment & Merchandising Technologies, Aerospace & Electronics and Engineered Materials. Crane Co. has approximately 12,000 employees in the Americas, Europe, the Middle East, Asia and Australia. Crane Co. is traded on the New York Stock Exchange (NYSE:CR).
Overview of Crane Co's 3rd quarter 2019 earnings report
Data below refers to quarterly data unless specified otherwise:
- Net sales: $772.3 million (down from $855.8 billion for the same period of the previous year)
- Net sales decreased by -9.75% over the last 12 months
- Cost of sales: $494.4 million (down from $544.8 million for the same quarter of the previous year)
- Operating income: $109.3 million (down from $123.9 million for the same quarter of the previous year)
- Net income: $72.5 million (down from $97 million from for the same period of the previous year)
- Diluted earnings per share: $1.19 (down from $1.55 for the same period of the previous year)
- PE ratio of Crane Co: 17.7
- Quarterly dividend declared: $0.39
- Dividend yield: 1.85%
- Diluted weighted-average shares outstanding: 60.8 million (down from 61.1 million for the same period of the previous year)
- Cash and cash equivalents $388.8 million
- Cash and cash equivalents per share: $6.39
- Cash and cash equivalents makes up 7.58% of Crane Co's market capital
- Cash and cash equivalents makes up 9.3% of Crane Co's total assets
- Accounts receivable: $534 million
- Accounts receivable makes up 12.85% of Crane Co's total assets
- Goodwill: $1.405 billion
- Goodwill per share: $23.10
- Goodwill makes up 33.7% of Crane Co's total assets
- Stockholders equity in Crane Co"$1.7 billion
- Stockholders equity per share:$27.96
- Crane Co is trading at 3 times its stockholders equity which is within the expected range of between 2 and 4 that most firms tend to trade at.
- Cash generated from operations: $118.5 million
- Cash generated from operations per share: $1.94
Crane Co's management commentary on their 3rd quarter 2019 results
STAMFORD, Conn.--(BUSINESS WIRE)--Crane Co. (NYSE: CR), a diversified manufacturer of highly engineered industrial products, reported third quarter 2019 GAAP earnings per diluted share (EPS) of $1.19 compared to $1.59 per diluted share in the third quarter of 2018. Excluding Special Items, third quarter 2019 EPS of $1.40 compared to $1.62 in the third quarter of 2018. (Please see the attached Non-GAAP Financial Measures tables for a detailed reconciliation of reported results to adjusted measures.)
Third quarter 2019 sales were $772 million, a decrease of 10% compared to the third quarter of 2018. The sales decrease was comprised of a $69 million, or 8%, decline in core sales, a $12 million, or 1%, impact from unfavorable foreign exchange, and a $2 million impact from divestitures.
Third quarter 2019 operating profit was $109 million, a decline of 12% compared to $124 million in the third quarter of 2018. Operating profit margin was 14.2% compared to 14.5% last year. Excluding Special Items, third quarter 2019 operating profit was $114 million, a decline of 14% compared to $133 million in the third quarter of 2018. Excluding Special Items, operating profit margin of 14.8% compared to 15.5% last year. (Please see the attached Non-GAAP Financial Measures tables for a detailed reconciliation of reported results to adjusted measures.)
Max Mitchell, Crane Co. President and Chief Executive Officer commented: "Operationally, we delivered another solid quarter of results. However, at Crane Currency, U.S. Government sales and orders were well below our expectations. During our 3rd quarter, the Federal Reserve issued its annual Currency Print Order to the Bureau of Engraving and Printing; that order for finished banknotes to be delivered during the Federal Reserve’s next fiscal year ending September 30, 2020, was 18% lower than for fiscal 2019, attributed primarily to ‘the intentional use of accumulated unissued inventory.’ We have worked closely with our customer over the last several weeks to gain a deeper understanding of the situation. While U.S. currency in circulation continues to grow, modest overproduction in recent years has resulted in excess inventory, and our shipments will remain at reduced levels during a period of destocking. These inventory adjustments have happened in the past, and we do expect our shipments to revert back to normal levels in the following fiscal year.
Consequently, we are reducing our 2019 EPS guidance, excluding Special Items, to a range of $5.90-$6.10, from our prior range of $6.25-$6.45. We remain very excited about the medium- and long-term demand profile for Crane Currency - both with the U.S. Government, as well as with our international customers - and we see many opportunities for growth and profit improvement at this business."
Third quarter 2019 sales were $772 million, a decrease of 10% compared to the third quarter of 2018. The sales decrease was comprised of a $69 million, or 8%, decline in core sales, a $12 million, or 1%, impact from unfavorable foreign exchange, and a $2 million impact from divestitures.
Third quarter 2019 operating profit was $109 million, a decline of 12% compared to $124 million in the third quarter of 2018. Operating profit margin was 14.2% compared to 14.5% last year. Excluding Special Items, third quarter 2019 operating profit was $114 million, a decline of 14% compared to $133 million in the third quarter of 2018. Excluding Special Items, operating profit margin of 14.8% compared to 15.5% last year. (Please see the attached Non-GAAP Financial Measures tables for a detailed reconciliation of reported results to adjusted measures.)
Max Mitchell, Crane Co. President and Chief Executive Officer commented: "Operationally, we delivered another solid quarter of results. However, at Crane Currency, U.S. Government sales and orders were well below our expectations. During our 3rd quarter, the Federal Reserve issued its annual Currency Print Order to the Bureau of Engraving and Printing; that order for finished banknotes to be delivered during the Federal Reserve’s next fiscal year ending September 30, 2020, was 18% lower than for fiscal 2019, attributed primarily to ‘the intentional use of accumulated unissued inventory.’ We have worked closely with our customer over the last several weeks to gain a deeper understanding of the situation. While U.S. currency in circulation continues to grow, modest overproduction in recent years has resulted in excess inventory, and our shipments will remain at reduced levels during a period of destocking. These inventory adjustments have happened in the past, and we do expect our shipments to revert back to normal levels in the following fiscal year.
Consequently, we are reducing our 2019 EPS guidance, excluding Special Items, to a range of $5.90-$6.10, from our prior range of $6.25-$6.45. We remain very excited about the medium- and long-term demand profile for Crane Currency - both with the U.S. Government, as well as with our international customers - and we see many opportunities for growth and profit improvement at this business."
Crane Co (NYSE: CR) stock price history
The image below, obtained from Google, shows the stock price history of Crane Co. over the last 5 years. And its been a good time for Crane Co. stockholders. 5 years ago the stock was trading at around $62.40 a stock and its currently trading at $84.27 a stock. That's a decent return of 35.04% provided to Crane Co. stockholders over the last 5 years. The opportunity cost of holding Crane Co. stock instead of say Netflix that returned over 300% over a 5 year period becomes significant.
The stock of Crane Co. is trading at a lot closer to its 52 week high of $94.67 than it is to its 52 week low of $67.18, which to us is a indication that the short term sentiment and momentum of Crane Co. stock is positive.
The stock of Crane Co. is trading at a lot closer to its 52 week high of $94.67 than it is to its 52 week low of $67.18, which to us is a indication that the short term sentiment and momentum of Crane Co. stock is positive.
Recent coverage of Crane Co
The extract below discusses the latest news regarding Crane Co as obtained from TheStreet.com
Crane Co., a diversified manufacturer of highly engineered industrial products, today announced its regular quarterly dividend of $0.39 per share for the fourth quarter of 2019. The dividend is payable on December 9, 2019 to shareholders of record as of the close of business on November 29, 2019. Crane Co. is a diversified manufacturer of highly engineered industrial products. Founded in 1855, Crane Co. provides products and solutions to customers in the chemicals, oil & gas, power, automated payment solutions, banknote design and production and aerospace & defense markets, along with a wide range of general industrial and consumer related end markets.
Crane Co., a diversified manufacturer of highly engineered industrial products, today announced its regular quarterly dividend of $0.39 per share for the fourth quarter of 2019. The dividend is payable on December 9, 2019 to shareholders of record as of the close of business on November 29, 2019. Crane Co. is a diversified manufacturer of highly engineered industrial products. Founded in 1855, Crane Co. provides products and solutions to customers in the chemicals, oil & gas, power, automated payment solutions, banknote design and production and aerospace & defense markets, along with a wide range of general industrial and consumer related end markets.
Crane Co (NYSE: CR) latest stock valuation
So what is Crane Co stock worth based on the release of their latest earnings report? Based on Crane Co's latest earnings report and their guidance that was revised downwards our valuation models provide a target (full value) price for the stock of Crane Co at $78.60 a stock and therefore believe the stock of Crane Co is overvalued
We usually suggest that long term and fundamental investors get in at least 10% below our target (full value) price which in this case is $78.60. Therefore we believe a good entry point into Crane Co's stock is at $70.80 or below. We expect the stock of Crane Co to pull back from current levels to levels closer to our target price (full value price) in coming weeks and moths as we believe it is overvalued at this point in time.
We usually suggest that long term and fundamental investors get in at least 10% below our target (full value) price which in this case is $78.60. Therefore we believe a good entry point into Crane Co's stock is at $70.80 or below. We expect the stock of Crane Co to pull back from current levels to levels closer to our target price (full value price) in coming weeks and moths as we believe it is overvalued at this point in time.
Next earnings release date for Crane Co.
It is expected that Crane Co. 4th quarter and full year results of their 2019 fiscal year will be released in late January 2020 to early February 2020