Industrial conglomerate Crane (CR 4.17%) overhauled its operations earlier this year, splitting off some of its tech as a separate company. This week, the market got an update on how the post-split Crane is performing, and investors liked what they saw.
As of Friday afternoon, shares of Crane are up more than 10% for the week, according to data provided by S&P Global Market Intelligence, after strong earnings and an optimistic forecast for what is to come.
Crane is building something special
Crane is a manufacturer of valves, pumps, and other highly engineered components for the aerospace, defense, electronics, and fluid control sectors. In April, the company separated its asset-tracking and monitoring business as Crane NXT, allowing management to focus its resources on building its core offerings.
The company today has an aerospace arm that makes electrical and safety systems; a process flow tech arm that manufactures a range of valves, pumps, and controls; and an engineered materials unit that makes fiberglass reinforced plastics.
The company performed well in its most recent quarter. On Monday, Crane reported adjusted earnings of $1.03 per share in the quarter on revenue of $530 million, beating Wall Street expectations for $0.87 per share in earnings on sales of $509 million. Core year-over-year sales growth came in at 9%, and the backlog grew by 7%.
"Crane delivered yet another strong quarter, consistently demonstrating our differentiated execution and accelerating results from growth initiatives," CEO Max Mitchell said in a statement.
The company also raised its full-year earnings guidance to between $4.05 and $4.20 per share, up from $3.80 to $4.10. Wall Street had expected Crane to earn $4.05 for the year.
NYSE: CR
Key Data Points
Can Crane shares fly higher from here?
It's an uncertain environment for manufacturing companies, but Crane's results were strong, and the backlog indicates no slowdown in demand. Given the strength of the commercial order book and rising expectations for defense, the aerospace side of Crane should remain in growth mode even if the process flow and materials units slow in the months to come.
The company also remains on the hunt for acquisitions, ready to take advantage of any valuation declines should the economy stall.
Crane is unlikely to perform like a tech stock anytime soon, but the company offers a solid trajectory for steady growth for the foreseeable future. It also pays a dividend that is currently yielding about 0.8%. For investors looking for ballast and predictability in their portfolio without sacrificing growth, Crane is a stock worth considering.
