Crane Company

Crane said total sales were up 26% year over year in Q2, with 5% core growth. Adjusted operating profit increased 37%, and adjusted operating margin expanded 180 basis points to 21.3%. Richard Maue said sales from the four acquisitions contributed 20% of growth, total core FX-neutral backlog was up 7% year over year and 5% sequentially, and core orders were up 2% year over year. AAT sales were $339 million, up 30%, with core sales up 13.3%; AAT adjusted segment margin was 25.8% versus 26.6% last year. PFT sales were $386 million, up 21%, with core sales down 1.4%; PFT adjusted operating margin was 22.2%, about 80 basis points above last year. Management raised full-year adjusted EPS guidance to $6.85 to $7.05, said acquisitions should contribute about $0.20 per share this year, and expects Q3 to be similar to Q2 with Q4 modestly lower due to seasonality. They also said full-year AAT core sales growth should be slightly ahead of the 7% to 9% algorithm, while PFT core growth should remain flat to up low-single-digits.

Alex Alcala struck an upbeat tone, calling the quarter record-setting and pointing to strong execution, record backlog, and broad momentum across both segments. He emphasized that the recently acquired businesses are integrating ahead of plan, with synergies arriving faster than expected and new growth opportunities emerging. He also highlighted share gains in aerospace, defense, missiles, and industrial markets, and said Crane is positioned to keep compounding through 2026 and into 2027.

Richard Maue focused on the quality of the numbers and the leverage in the business. He said total sales rose 26%, adjusted operating profit rose 37%, and backlog and orders both improved, while noting the company repaid $100 million of debt in the quarter and another $90 million after quarter-end, leaving pro forma net leverage at about 1.2x. He also flagged that adjusted results exclude tariff recoveries, said corporate expense should stay in the $80 million to $85 million range, net non-operating expense around $58 million, and the tax rate about 23%.

Analysts pressed on PFT’s weak organic growth, and management said demand strengthened through the quarter, orders improved, and they expect PFT to turn positive year over year in the second half. Questions also focused on M&A, where management said the pipeline has never been stronger, but timing remains unpredictable; they reiterated that deals must be accretive to growth, margins, and technology, and that M&A is the top capital allocation priority. Other topics included missile-defense exposure, commercial aftermarket durability, and acquisition ROI, with management saying missile demand could expand four to five times by the end of the decade and that the acquired businesses are tracking ahead of the original five-year ROI plan.