Industrial products maker Crane Co. (CR) on Monday reported a 12 percent increase in profit for the first quarter as lower sales were offset by a decline in expenses. Looking ahead, Crane reaffirmed its financial guidance for fiscal 2013.
Separately, Crane said that Chief Executive Officer Eric Fast will retire from the company in January 2014. He will be succeeded by Max Mitchell, currently president and chief operating officer.
Mitchell, aged 49, joined Crane in 2004 as Vice President of Operational Excellence. He was promoted to President of Fluid Handling in 2005 and later became Executive Vice President and Chief Operating Officer in May 2011. Mitchell was appointed President of Crane Co. in January 2013.
Fast joined Crane in 1999 as President and COO and was promoted to CEO in January 2001.
Commenting on the first-quarter results, Fast said, "Despite the decline in sales, the impact of our 2012 repositioning actions, continued focus on productivity and solid execution led to record earnings and continued strong operating margin expansion in the first quarter. While we remain cautious on the global economic environment, our backlog position and improving order and quote activity during the quarter supports our full year 2013 sales and earnings guidance."
Segment wise, aerospace & electronics sales for the quarter declined 6 percent from the year-ago period, while engineered materials increased 4 percent and merchandising systems sales rose 2 percent. Fluid handling sales declined 4 percent.
Stamford, Connecticut-based Crane's first-quarter net income was $57.79 million or $0.99 per share, up from $51.66 million or $0.88 per share in the year-ago period.
The latest quarter's results included transaction costs of $2.9 million or $0.05 per share, related to the $820 million pending acquisition of MEI Conlux Holdings.
Excluding these costs, adjusted earnings for the latest quarter were $60.68 million or $1.04 per share, compared to $50.84 million or $0.86 per share in the year-ago quarter. On average, six analysts polled by Thomson Reuters expected the company to earn $1.03 per share for the quarter. Analysts' estimates typically exclude special items.
Total net sales for the quarter declined 3 percent to $627.57 million from $645.61 million in the same period last year. Analysts had a consensus revenue estimate for the quarter of $659.37 million.
The decline in sales resulted from a core sales decline of 2.4 percent and unfavorable foreign exchange of $2.5 million.
Looking ahead to fiscal 2013, Crane reiterated its forecast for earnings per share in a range of $4.10 to $4.30, representing an increase of 11 to 16 percent over 2012 earnings per share of $3.70 before special items and on a continuing operations basis, which excludes profits from discontinued operations of $0.05 per share.
The company reaffirmed its outlook full-year core sales to grow 1 to 3 percent, excluding acquisition and foreign exchange impacts.
Analysts expect the company to report earnings of $4.23 per share for the year on revenues of $2.71 billion.
Crane announced a regular quarterly dividend of $0.28 per share for the second quarter of 2013. The dividend is payable on June 11 to shareholders of record as of the close of business on May 31.
CR closed Monday's trading at $52.34, down $0.70 or 1.32 percent on a volume of 447,592 shares.
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