STAMFORD, Conn.--(BUSINESS WIRE)-- Crane Co., a diversified manufacturer of highly engineered industrial products, reported first quarter 2016 earnings of $0.93 per diluted share, compared to $0.87 per share in the first quarter of 2015. Excluding Special Items, first quarter 2015 earnings per diluted share were $0.92. (Please see the attached Non-GAAP Financial Measures tables.)
First quarter 2016 sales were $660 million, a decrease of 3% compared to $679 million in the first quarter of 2015. The sales decline was comprised of a $13 million, or 2%, impact from unfavorable foreign exchange, and a core sales decline of $6 million, or 1%.
Operating profit in the first quarter was $85.5 million, down 1% compared to $86.0 million in the first quarter of 2015. Excluding Special Items, operating profit was $90.4 million in the first quarter of 2015.
The effective tax rate in the first quarter was 27.9%, down from 32.7% last year. The lower effective tax rate reflects changes in Japanese tax law, along with an expected favorable geographic mix of earnings.
"Our operating results in the first quarter were in line with our expectations. While Fluid Handling sales and orders remain depressed, market conditions and our margin performance were consistent with the outlook we provided earlier this year. We remain pleased with the continued strong performance from our other three segments, and we believe that we are on track to achieve our 2016 objectives. Consequently, we are reaffirming our previously issued full year guidance," said Max Mitchell, Crane Co. President and Chief Executive Officer.
Segment Results
All comparisons detailed in this section refer to operating results for the first quarter 2016 versus the first quarter 2015, excluding Special Items in 2015.
Fluid Handling
Sales decreased $27 million, driven by an $18 million, or -7%, core sales decline, and $9 million, or -3%, of unfavorable foreign exchange. Operating margin declined to 10.3%, compared to 13.1% last year, primarily reflecting the impact of lower volumes, and to a lesser extent, competitive pricing, partially offset by productivity and repositioning benefits. Fluid Handling order backlog was $263 million at March 31, 2016, compared to $267 million at December 31, 2015 and $304 million at March 31, 2015. On a constant-currency basis, backlog was approximately flat compared to the end of the prior quarter, and down -12% compared to the end of the first quarter of 2015.
Payment & Merchandising Technologies
Sales were flat, with a $4 million, or 2%, increase in core sales offset by unfavorable foreign exchange of $4 million, or -2%. Operating margin expanded 300 basis points to 16.3%, driven primarily by integration synergies, higher volumes and strong productivity.
Aerospace & Electronics
Sales increased $10 million, driven by a 6% increase in core sales. The core sales increase primarily reflects improvement in sales to the defense markets. Operating margin improved 20 basis points to 19.3%, primarily reflecting higher volumes and productivity, partially offset by higher planned engineering spending and unfavorable product mix. Aerospace & Electronics order backlog was $419 million at March 31, 2016, compared to $436 million at December 31, 2015 and $446 million at March 31, 2015.
Engineered Materials
Sales decreased $1 million, driven by lower sales to the Recreational Vehicle market, partially offset by higher sales to the Transportation and Building Product markets. Operating margin declined 40 basis points to 20.1%, primarily reflecting lower volumes and competitive pricing, partially offset by strong productivity and lower material costs. Full report.
