Crane Raises 2026 Outlook as Q3 Sales Rise 28%

Crane Company (NYSE: CR) raised its full-year 2026 revenue and adjusted earnings guidance after third-quarter sales increased 28.1%, supported by acquisitions and 7.7% core growth. Adjusted operating margin also expanded, although higher transaction costs and acquisition-related amortization weighed on GAAP profitability.

For the three months ended September 30, Crane reported GAAP sales of $754.6 million, up from $589.2 million a year earlier. Acquisitions contributed 21.1 percentage points to growth, while foreign-currency translation and a tariff recovery adjustment reduced the reported change by 0.4 and 0.3 percentage points, respectively.

GAAP operating profit rose 18.8% to $140.6 million, but operating margin declined 150 basis points to 18.6%. The quarter included $12.6 million of transaction-related expenses, $15.9 million of acquisition-related intangible amortization and $0.8 million of net tariff refunds.

Excluding special items, adjusted operating profit increased 35.8% to $169.9 million, and adjusted operating margin widened 130 basis points to 22.5%. Adjusted EBITDA advanced 35% to $180.8 million, representing a 23.9% margin. GAAP diluted earnings per share from continuing operations rose 6.4% to $1.66, while adjusted EPS increased 22.8% to $2.05.

Aerospace backlog and original-equipment demand rise

Aerospace & Advanced Technologies generated sales of $344.1 million, a 27.4% year-over-year increase. Core growth was 9.5%, and acquisitions added 17.9%.

Original-equipment sales posted 14% core growth, compared with 1% for aftermarket sales. Crane said aftermarket core growth was 11.1% when excluding initial provisioning in the prior-year quarter. The core sales mix was 68% original equipment and 32% aftermarket.

The segment’s backlog increased 19.6% to $1.26 billion. GAAP operating profit rose 26.1% to $85.4 million, with margin edging down 30 basis points to 24.8%. On an adjusted basis, operating profit climbed 32.7% to $90.6 million and margin expanded 100 basis points to 26.3%.

Acquisitions drive Process Flow sales growth

Process Flow Technologies reported sales of $410.5 million, up 28.7%. Acquisitions contributed 23.9 percentage points, while core growth accounted for 6.2 percentage points. Foreign exchange and the tariff recovery adjustment each reduced reported growth by 0.7 percentage points.

The segment’s backlog rose 65.6% to $634.1 million. Excluding acquisition and currency effects, backlog increased 8% from a year earlier and 2% sequentially. Core foreign-exchange-neutral orders grew 20% year over year and 8% from the second quarter.

GAAP operating profit increased 14.3% to $80.9 million, while margin contracted 250 basis points to 19.7%. Adjusted operating profit rose 34.2% to $99.2 million, and adjusted margin increased 80 basis points to 24%.

Full-year outlook moves higher

Crane now expects 2026 revenue of $2.886 billion to $2.922 billion, compared with its prior range of $2.87 billion to $2.90 billion. The company raised its adjusted EPS forecast to $7.23 to $7.38 from $6.85 to $7.05 and now projects an adjusted segment operating margin of about 24%, versus its previous outlook of more than 23%.

Management expects full-year core sales growth at the high end of its prior 5% to 6% range. Foreign exchange is projected to provide an approximately 1% revenue benefit, while acquisitions are expected to contribute about 18% to 20%, trending toward the upper end of that range. The acquisition contribution includes Druck, Panametrics, Reuter Stokes and optek-Danulat.

The company maintained its forecast for free-cash-flow conversion of 90% to 100%. It also continues to expect corporate costs of $80 million to $85 million, net non-operating expense of about $58 million, a 23% tax rate and approximately 59 million diluted shares.

Third-quarter free cash flow was $116.3 million, compared with $116.8 million a year earlier. Adjusted free cash flow increased to $126.4 million from $118.9 million. For the first nine months, free cash flow rose to $183.8 million from $145.3 million, while adjusted free cash flow increased to $219.2 million from $154 million.

Crane ended the quarter with about $316 million of cash, total liquidity of approximately $1.19 billion and $929 million of debt. Net debt to EBITDA was 1.1 times, and the company estimated that it had more than $1.5 billion of capacity for potential acquisitions.

Crane’s outlook remains subject to risks including inflation, tariffs, geopolitical and macroeconomic volatility, variable product demand, supply-chain disruptions, raw-material costs and regulatory requirements. The company also identified uncertainty around completing and integrating acquisitions, executing dispositions, achieving expected transaction benefits, cybersecurity, competition and risks specific to its two reporting segments.