STAMFORD, Conn.--(BUSINESS WIRE)-- Crane Co. reported third quarter 2016 GAAP earnings of $1.07 per diluted share, compared to $0.97 per share in the third quarter of 2015. Excluding Special Items, third quarter 2015 earnings per diluted share were $1.03.
Third quarter 2016 sales were $694 million, an increase of 4% compared to $670 million in the third quarter of 2015. Core sales increased $37 million, or 5.5%, partially offset by a $12 million, or 2%, impact from unfavorable foreign exchange.
Operating profit in the third quarter was $104 million, up 11% compared to $93 million in the third quarter of 2015. Excluding Special Items, operating profit was $97 million in the third quarter of 2015.
The effective tax rate in the third quarter was 33.0% compared to 32.3% last year. Excluding Special Items, the effective tax rate in the third quarter of 2015 was 31.6%.
Max Mitchell, Crane Co. President and Chief Executive Officer, stated: "We delivered another strong quarter, with solid execution across all segments. We were particularly pleased with our growth and margin performance at Payment & Merchandising Technologies, with solid end market demand and progress on productivity supporting continued momentum into 2017. In addition, our teams across Fluid Handling continued to execute well, with another solid margin performance despite continuing end market challenges. Order activity remains generally stable in Fluid Handling, and although we continue to believe that demand is at a trough, we will exit the year with a lower backlog compared to when we entered 2016. Our Aerospace & Electronics team had an exceptionally strong performance executing on shipments for the Space Fence program in the quarter, though dilutive to margins; we will have lower shipments in the fourth quarter as we close out the program. Overall, we are pleased with our performance year to date and our prospects looking ahead, and we are raising the midpoints of our full-year adjusted EPS guidance by $0.06 and our free cash flow guidance by $5 million."
Segment Results
Fluid Handling
Sales decreased $20 million, driven by a $12 million, or -5%, core sales decline, and $8 million, or -3%, of unfavorable foreign exchange. Operating margin improved to 12.5%, compared to 11.8% last year, primarily reflecting the impact of productivity, repositioning benefits and favorable mix, partially offset by lower volumes, and to a lesser extent, competitive pricing. Fluid Handling order backlog was $242 million at September 30, 2016, compared to $267 million at December 31, 2015 and $279 million at September 30, 2015.
Aerospace & Electronics
Sales increased $27 million, driven by a 15% increase in core sales. The core sales increase was driven primarily by shipments on the Space Fence program. Operating margin declined 180 basis points to 19.6%, primarily reflecting unfavorable mix. Aerospace & Electronics order backlog was $377 million at September 30, 2016, compared to $436 million at December 31, 2015 and $460 million at September 30, 2015.
Payment & Merchandising Technologies
Sales increased $16 million, or 9%, driven by $21 million, or 12%, of core growth, partially offset by a $5 million, or -3%, impact from unfavorable foreign exchange. Operating margin expanded 250 basis points to 18.6%, driven primarily by integration synergies, the higher core sales and strong productivity.
Engineered Materials
Sales increased $1 million, driven by higher sales to the Recreational Vehicle and Building Product markets, partially offset by lower sales to the Transportation market. Operating margin decreased 220 basis points to 17.7%, primarily reflecting competitive pricing actions, partially offset by strong productivity. Full report.
