Crane Co (CR) Reports Solid Q4 Earnings and Optimistic 2024 Outlook
Adjusted EPS: Q4 adjusted EPS of $0.90, reflecting a solid performance.
Revenue Growth: 5% core year-over-year sales growth contributing to a 10% increase in net sales.
Operating Profit: Significant 38% year-over-year growth in operating profit from continuing operations.
Dividend Increase: Announced a 14% increase in annual dividend to $0.82 per share.
Acquisitions: Strategic acquisitions of Baum lined piping GmbH and Vian Enterprises, Inc. to bolster product portfolio.
2024 Guidance: Introduces adjusted EPS guidance of $4.55-$4.85, indicating a 10% growth at the midpoint.
Backlog: Record backlog of $701 million at Aerospace & Electronics segment.
On January 29, 2024, Crane Co (NYSE:CR) released its 8-K filing, detailing a strong finish to the year with robust fourth-quarter earnings and optimistic guidance for 2024. Crane Co, a diversified industrial firm known for its manufacturing of products such as valves, pumps, aerospace components, and fiberglass-reinforced plastic panels, has reported a year of solid financial achievements, with approximately $2 billion in revenue in 2022.
Financial Highlights and Performance
Crane Co's fourth-quarter performance showcased a 5% core sales growth and an 8% core year-over-year backlog growth. The company's operating profit from continuing operations soared by 38%, with an adjusted operating profit growth of 14%. This performance underscores Crane Co's operational efficiency and its ability to capitalize on market opportunities.
The company's financial achievements are particularly noteworthy in the context of the Industrial Products industry, where managing costs and optimizing operations are critical for maintaining competitive margins. Crane Co's record adjusted segment operating margins at its Process Flow Technologies segment and a record backlog in the Aerospace & Electronics segment are indicative of the company's strong market position and operational excellence.
Strategic Acquisitions and Capital Deployment
Crane Co has demonstrated significant progress in its capital deployment and acquisition strategy, with the recent acquisitions of Baum lined piping GmbH and Vian Enterprises, Inc. These strategic moves are expected to strengthen Crane Co's product and technology portfolio, aligning with the company's growth initiatives and enhancing shareholder value.
2024 Outlook and Dividend Increase
Looking ahead to 2024, Crane Co has introduced an adjusted EPS guidance of $4.55-$4.85, reflecting a confident 10% growth compared to the 2023 adjusted EPS. The company's Board of Directors has also declared a 14% increase in the quarterly dividend, showcasing Crane Co's commitment to delivering shareholder returns.
Financial Statements Summary
Crane Co's fourth-quarter net sales reached $533 million, a 10% increase from the previous year, with the Baum acquisition contributing a 3% benefit and favorable foreign exchange adding another 1%. The company's operating profit margin improved by 260 basis points to 12.6%, while the adjusted operating profit margin saw a 50 basis point increase to 14.0%.
Cash flow from operating activities was robust at $160 million, with capital expenditures of $13 million, resulting in a strong free cash flow of $147 million. Adjusted free cash flow, which excludes transaction-related cash outflows, was $152 million.
"Crane delivered yet another impressive quarter, with continued evidence of differentiated execution and accelerating results from growth initiatives," said Max Mitchell, Crane's President and Chief Executive Officer. "We are confident that we will continue to drive shareholder value creation through further capital deployment."
As of December 31, 2023, Crane Co's cash balance stood at $330 million, with total debt of $249 million. The company's net debt to EBITDA ratio is less than 0.1x, providing substantial financial flexibility for further capital deployment.
Conclusion
Crane Co's fourth-quarter results and forward-looking guidance reflect a company that is not only performing well but is also strategically positioning itself for sustained growth. The company's financial strength, strategic acquisitions, and commitment to shareholder returns paint a positive outlook for 2024 and beyond.
For more detailed information and financial tables, please refer to the full 8-K filing.
Explore the complete 8-K earnings release (here) from Crane Co for further details.
This article first appeared on GuruFocus.
