Crane Holdings Co., a diversified manufacturer of highly engineered industrial products, reported second quarter 2022 financial results and reaffirmed its full-year 2022 outlook excluding Special Items.
Max Mitchell, Crane Holdings Co. president and chief executive officer, stated in the announcement: “Our momentum continues with another quarter of strong results reflecting differentiated execution despite a challenging operational environment as well as solid underlying trends in our primary end markets. Our overall performance in the first half, with adjusted operating margins of 17.3%, core sales growth of 7%, and core order growth of 14%, all support our outlook, and we are well on-track to achieve our full-year guidance.
"In addition to delivering consistently strong operational performance, our businesses and portfolio are positioned to support accelerating growth. Across all businesses, our commercial excellence, innovation, and investment in technology roadmaps support our ability to drive outperformance compared to our peers throughout the cycle. We are also making continued progress towards our early 2023 separation which will permit each post-separation company to optimize investment and capital allocation, further accelerate growth, and unlock shareholder value.”
Second-quarter 2022 results
Second quarter 2022 sales were $864 million, an increase of $9 million, or 1%, compared to the second quarter of 2021. The sales increase was comprised of a $60 million, or 7%, increase in core sales, partially offset by a $30 million, or 4%, impact from unfavorable foreign exchange, and a $22 million, or 3%, divestiture impact.
Second quarter 2022 operating profit was $124 million, compared to $145 million in the second quarter of 2021. Operating profit margin was 14.4%, compared to 16.9% last year, with the decline driven primarily by higher transaction costs in 2022, unfavorable mix and lower volumes, partially offset by strong pricing and productivity; higher pricing more than offset inflation. Excluding Special Items, second quarter 2022 operating profit was $145 million, compared to $148 million last year. Excluding Special Items, operating profit margin was 16.8%, compared to 17.3% last year, due to unfavorable mix and lower volume, largely offset by strong productivity and pricing.
2022 outlook and guidance
The company is adjusting its full year 2022 GAAP EPS guidance to $9.80-$10.20, from $6.80-$7.20, primarily to reflect the second quarter $3.58 after-tax gain on the sale of Crane Supply. Excluding Special Items, full year 2022 EPS guidance remains $7.45-$7.85.
Rich Maue, Crane Holdings Co. senior vice president and chief financial officer, added in the announcement: "We continue to see robust demand across our end markets, and supply chain challenges and inflationary pressures remain consistent with the outlook we provided in January of this year. Given our strong performance in the first half of the year, including pricing actions to fully offset the impact of inflation, we are confident in our ability to achieve our full-year guidance."
"We have exciting opportunities and developments across each of our businesses. At Aerospace & Electronics, we expect the segment to return to pre-COVID sales and margin levels within the next two years as commercial air traffic and OE build rates continue to recover. We are also making further progress positioning this business for the future with our participation on numerous prototypes and demonstrator programs utilizing our next-generation power conversion, sensing, and thermal management technologies. Process Flow Technologies is on-track to achieve record adjusted margins this year - with further upside in the years ahead - and its traction with new product development and commercialization has never been stronger, with tangible share gains as evidence of success. And at Payment & Merchandising Technologies, both Crane Payment Innovations and Crane Currency continue to perform extremely well and gain share in their core markets, while they both pursue breakthrough opportunities, in areas such as product authentication, that could drive a step-function increase in sales and profitability. Overall, we are extremely excited about the opportunities across our portfolio, and post-separation, Crane Company and Crane NXT are both positioned to further accelerate growth."
Second-quarter 2022 segment results
Payment & Merchandising Technologies
Sales of $334 million increased $6 million, or 2%, driven by a $23 million, or 7%, increase in core sales, partially offset by a $17 million, or 5%, impact from unfavorable foreign exchange. Operating profit margin increased to 24.2%, from 23.7% primarily reflecting strong pricing and productivity, partially offset by unfavorable mix. During the quarter, stronger pricing offset the impact of higher inflation.
All comparisons detailed in this section refer to operating results for the second quarter 2022 versus the second quarter 2021.