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Crane Co, USA
COMPANY WATCH
Crane Co, USA
Curtiss-Wright Corp, USA
Key Figures (US$ million) Three months ended 30.6 2007
2006
660.9
558.2
Key Figures (US$ million) Three months ended 30.6 2007
2006
365.6
309.6
281.4
250.0
Net Sales Of Which: Flow Control
163.2
129.3
Operating Profit Of Which: Fluid Handling
71.8
66.1
Cost of Sales
247.6
204.1
33.4
29.9
Gross Profit
118.0
105.6
Net Income
45.7
44.5
R&D Expenses
11.5
11.3
38.4
33.1
Six months ended 30.6 2007
2006
Operating Income Of Which: Flow Control
10.0
12.0
1289.1
1107.5
Net Earnings
21.4
21.1
544.5
492.2
140.2
123.3
Six months ended 30.6 2007
2006
698.2
592.2
64.5
55.4
89.4
81.9
Net Sales Of Which: Flow Control
300.9
250.5
Cost of Sales
468.8
394.6
Gross Profit
229.4
197.6
R&D Expenses
22.8
21.3
Operating Income Of Which: Flow Control
73.6
57.7
20.0
22.9
Net Earnings
40.9
33.4
Net Sales Of Which: Fluid Handling
Net Sales Of Which: Fluid Handling Operating Profit Of Which: Fluid Handling Net Income
COMMENT The Fluid Handling segment increased second quarter 2007 sales by US$31.4 million, or 13%, including US$21.9 million (9%) of core sales and favourable foreign currency translation of US$9.5 million (4%). Operating profit increased US$3.5 million, or 12%. Fluid Handling margins remained at 12% reflecting more price competitive project work and investments in new products and systems to support future growth. The Fluid Handling segment backlog was US$259 million at 30 June 2007, compared with US$199 million at 30 June 2006 and US$211 million at 31 December 2006. The 30% increase in backlog over the second quarter of 2006 reflects increased global demand particularly from the chemical/ pharmaceutical and energy industries, and generally higher demand from many commercial applications.
August 2007
Overall Crane Co reported second quarter 2007 net income of US$45.7 million. Second quarter 2007 sales increased US$102.7 million, or 18%, including core business growth of US$42.3 million (8%), sales from acquired businesses (net of divestitures) of US$48.1 million (8%) and favourable foreign currency translation of US$12.3 million (2%). Group order backlog at 30 June 2007 totaled US$739 million, 16% higher (15% higher excluding acquisitions) than the backlog of US$637 million at 30 June 2006 and 9% higher than US$677 million at 31 December 2006. “Strong year-over-year improvement in operating profits and margins in our Engineered Materials business and the positive impact of the 2006 acquisitions on our Merchandising Systems businesses were key drivers of our results,” said Crane Co president and CEO Eric Fast. ■
COMMENT Flow Control’s second quarter sales were US$163.2 million, up 26% over the comparable period last year due to solid organic growth and the contribution from 2006 and 2007 acquisitions. Sales from the base businesses increased 14% on 2006’s second quarter. This organic sales growth was due to higher sales to the oil and gas market, led by increased demand for coker valve products, as well strong sales of other valves and field service work within the market as worldwide refineries continue to invest in increasing capacity, improving worker safety and operational efficiencies. Operating income for the Flow Control segment decreased
17% in the second quarter of 2007. Flow Control’s organic operating income decreased 25% in the second quarter of 2007 due to cost overruns on certain US Navy development contracts. In addition, labour inefficiencies, business consolidation costs, and higher material costs experienced within the oil and gas market contributed to the operating income decline. This segment continues to invest in development on certain commercial programs, which have an adverse impact on the margins in the short-term, but should provide good opportunity in the future. These items were partially offset by the higher sales volume. ■
Pump Industry Analyst
7
Crane Co, USA
Curtiss-Wright Corp, USA
Key Figures (US$ million) Three months ended 30.6 2007
2006
660.9
558.2
Key Figures (US$ million) Three months ended 30.6 2007
2006
365.6
309.6
281.4
250.0
Net Sales Of Which: Flow Control
163.2
129.3
Operating Profit Of Which: Fluid Handling
71.8
66.1
Cost of Sales
247.6
204.1
33.4
29.9
Gross Profit
118.0
105.6
Net Income
45.7
44.5
R&D Expenses
11.5
11.3
38.4
33.1
Six months ended 30.6 2007
2006
Operating Income Of Which: Flow Control
10.0
12.0
1289.1
1107.5
Net Earnings
21.4
21.1
544.5
492.2
140.2
123.3
Six months ended 30.6 2007
2006
698.2
592.2
64.5
55.4
89.4
81.9
Net Sales Of Which: Flow Control
300.9
250.5
Cost of Sales
468.8
394.6
Gross Profit
229.4
197.6
R&D Expenses
22.8
21.3
Operating Income Of Which: Flow Control
73.6
57.7
20.0
22.9
Net Earnings
40.9
33.4
Net Sales Of Which: Fluid Handling
Net Sales Of Which: Fluid Handling Operating Profit Of Which: Fluid Handling Net Income
COMMENT The Fluid Handling segment increased second quarter 2007 sales by US$31.4 million, or 13%, including US$21.9 million (9%) of core sales and favourable foreign currency translation of US$9.5 million (4%). Operating profit increased US$3.5 million, or 12%. Fluid Handling margins remained at 12% reflecting more price competitive project work and investments in new products and systems to support future growth. The Fluid Handling segment backlog was US$259 million at 30 June 2007, compared with US$199 million at 30 June 2006 and US$211 million at 31 December 2006. The 30% increase in backlog over the second quarter of 2006 reflects increased global demand particularly from the chemical/ pharmaceutical and energy industries, and generally higher demand from many commercial applications.
August 2007
Overall Crane Co reported second quarter 2007 net income of US$45.7 million. Second quarter 2007 sales increased US$102.7 million, or 18%, including core business growth of US$42.3 million (8%), sales from acquired businesses (net of divestitures) of US$48.1 million (8%) and favourable foreign currency translation of US$12.3 million (2%). Group order backlog at 30 June 2007 totaled US$739 million, 16% higher (15% higher excluding acquisitions) than the backlog of US$637 million at 30 June 2006 and 9% higher than US$677 million at 31 December 2006. “Strong year-over-year improvement in operating profits and margins in our Engineered Materials business and the positive impact of the 2006 acquisitions on our Merchandising Systems businesses were key drivers of our results,” said Crane Co president and CEO Eric Fast. ■
COMMENT Flow Control’s second quarter sales were US$163.2 million, up 26% over the comparable period last year due to solid organic growth and the contribution from 2006 and 2007 acquisitions. Sales from the base businesses increased 14% on 2006’s second quarter. This organic sales growth was due to higher sales to the oil and gas market, led by increased demand for coker valve products, as well strong sales of other valves and field service work within the market as worldwide refineries continue to invest in increasing capacity, improving worker safety and operational efficiencies. Operating income for the Flow Control segment decreased
17% in the second quarter of 2007. Flow Control’s organic operating income decreased 25% in the second quarter of 2007 due to cost overruns on certain US Navy development contracts. In addition, labour inefficiencies, business consolidation costs, and higher material costs experienced within the oil and gas market contributed to the operating income decline. This segment continues to invest in development on certain commercial programs, which have an adverse impact on the margins in the short-term, but should provide good opportunity in the future. These items were partially offset by the higher sales volume. ■
Pump Industry Analyst
7