Crane Co. (CR) reported stronger-than-expected Q3 results topping both earnings and revenue estimates, driven by robust performance across all segments despite ongoing inflationary pressures and supply chain constraints. The company also raised its FY2021 guidance well above the analyst expectations.
Notably, shares of the manufacturer of industrial products have gained 73.4% over the past year. (See Crane stock charts on TipRanks)
Markedly, adjusted earnings of $1.89 per share more than doubled year-over-year and significantly beat analysts’ expectations of $1.36 per share. The company reported earnings of $0.93 per share in the prior-year period.
Further, net sales jumped 21% year-over-year to $834 million and exceeded consensus estimates of $770.65 million. The increase in net sales reflected a surge in core sales, which increased 20%, driven by strength in its primary end markets. In addition, the company reported core order growth of 31% year-over-year and core backlog growth of 13%.
Based on the robust Q3 results and positive outlook, management raised its financial guidance for FY2021. The company now forecasts adjusted earnings to grow 80% year-over-year to between $6.35 and $6.45 per share, while the consensus estimate is pegged at $6.12 per share. This compares to the prior guidance range of $ $5.95 to $6.15 per share.
On top of this, revenues are forecast to be $3.15 billion, versus the consensus estimate and prior guidance of $3.1 billion.
Notably, the outlook does not include results from its Engineered Materials segment, which is currently classified as discontinued operations. Crane agreed to sell its Engineered Materials segment in May 2021.
Concurrent with the earnings announcement, the company also approved a $300 million share repurchase authorization.
Crane Co. CEO Max Mitchell commented, “In addition to our outstanding performance and near-term outlook, I continue to be very excited about the momentum we have with our ongoing investments in technology and our strategic growth initiatives, all of which are positioning Crane for long-term sustainable above-market growth.”
Stifel Nicolaus analyst Nathan Jones recently decreased the price target on Crane to $120 (15.5% upside potential) from $130 and reiterated a Buy rating.
Consensus among analysts is a Strong Buy based on 4 unanimous Buys. The average Crane price target of $118.25 implies 13.7% upside potential to current levels.
CR scores an 8 out of 10 on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.
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