Benzinga  Jan 31  Comment 
There are several reasons to be positive on industrial products company Crane Co. (NYSE: CR), according to an analyst at Stifel. The Analyst Stifel's Nathan Jones upgraded Crane from Hold to Buy, and increased his price target from $99 to...
Benzinga  Jan 29  Comment 
Crane earnings are just around the corner! Crane (NYSE: CR) will be releasing its next round of earnings Monday. For all of the relevant information, here is your guide for today's Q4 earnings announcement. Earnings and Revenue Crane EPS...
Benzinga  Feb 27  Comment 
Analysts at FBR Capital downgraded Crane Co. (NYSE: CR) from Outperform to Market Perform. The price target for Crane has been lowered from $77.00 to $67.00. Crane shares have dropped 4.31% over the past 52 weeks, while the S&P 500 index has...
Benzinga  Feb 11  Comment 
Analysts at RBC Capital downgraded Crane Co. (NYSE: CR) from Outperform to Sector Perform. The price target for Crane is set to $73. Crane shares have gained 6.04% over the past 52 weeks, while the S&P 500 index has surged 13.71% in the same...
Benzinga  Feb 2  Comment 
Analysts at KeyBanc downgraded Crane Co. (NYSE: CR) from Buy to Hold and removed the price target of $75.00. Crane shares have surged 1.35% over the past 52 weeks, while the S&P 500 index has gained 14.53% in the same period. Crane's shares...
Cranes Today  Jan 30  Comment 
by Daniel Searle South Korean crane rental company Shinui Petra has hosted an event to showcase its range of Manitowoc crawler cranes.
Benzinga  Jan 15  Comment 
Canaccord Genuity initiated coverage on shares of Crane Co. (NYSE: CR) with a Hold rating. The target price for Crane is set to $65. Crane shares have dropped 18.99% over the past 52 weeks, while the S&P 500 index has gained 8.96% in the...
Cranes Today  Jan 13  Comment 
by Daniel Searle Tennessee-based crane company Gilley Crane Rigging and Lifting has lifted two 100,000lb boilers at the Jack Daniel’s whiskey distillery in Lynchburg.
Cranes Today  Jan 13  Comment 
by Daniel Searle Pre-fabricated, low-energy houses are being constructed in the Netherlands using a Sennebogen 673 telecrawler, provided by crane company Meijmat.


Crane Company (NYSE: CR) makes engineered industrial products, such as fiberglass composites for recreational vehicles (RVs), airplane components and fluid handling valves. Fluid handling valves control the flow of coolant, chemicals, and water and are used in facilities ranging from nuclear power plants to chemical and pharmaceutical production facilities and water filtration plants. [1] In 2007, fluid valves were responsible for 43% of Crane's revenues.

Gas prices play a significant role in determining company's ability to sell its fiber glass products. In 2007, higher oil prices led to a drop in RV production, reducing demand for the company's fiberglass paneling. During the same year, a 23% decline in transportation industry demand for new vehicles reduced Crane's sales of materials for production of truck bodies and refrigerated trucks.[2] Nevertheless, price increases in 2006 and sales from companies acquired in 2006 led to a net increase in revenue for the engineered materials segment.[3]

As a result of its use of asbestos in its products over the past century, Crane is the target of many personal injury claims for asbestos-related health problems. As of December 31, 2007, the company faced 80,999 asbestos liability claims. In 2007, Crane set aside $390 million for predicted asbestos liability costs through 2017, which reflects a $37 million/year expected liability. As asbestos is in many products and asbestos-related health issues only arise many years after exposure, the company remains vulnerable to new claims in the coming years.

Business and Finances

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The company has five business segments: [4]

  • Fluid handling ($1,136 million in revenues, 43% of revenues) - valves for industrial use
  • Aerospace and electronics ($629 million in revenues, 23% of revenues) - commercial and military aircraft components
  • Merchandising systems ($388 million in revenues, 15% of revenues) - vending machines
  • Engineered materials ($331 million in revenues, 13% of revenues) - fiberglass composites for vehicles and construction
  • Controls ($135 million in revenues, 5% of revenues) - sensors and controls for industrial use
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Crane had a net loss of $62.3 million dollars in 2007, although it was profitable in 2006 and 2005. Revenues grew by 16% in 2007, from $2.26 billion to $2.62 billion.[5] Nevertheless, due to a one-time charge of $390 million intended to cover future asbestos liabilities through 2017, the company recorded a loss margin of 4.1%, a decline from the 2006 net income margin of 11%.[6]

In fluid handling, Crane's largest segment, revenues increased by 14% in 2007.[7] This was accompanied by an increase in profit margins to 14% in 2007 from 10.7% in 2006.[8]

In 2007, Crane spent $106.8 million on research and development, mostly in its aerospace and electronics segment. This is a significant increase from 2005 research and development spending of $53.1 million. Most research is funded by company initiatives, with just $8.4 million coming from customers in 2007.[9]

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Trends and Forces

Personal Injury Claims for Asbestos Liability are an Ongoing Concern

Crane Company previously used asbestos in a number of its products, primarily from the engineered materials business segment. As of December 31, 2007, the company was facing a total of 80,999 asbestos-related liability claims, dealing with them in the judicial tort system. In 2007, the company spent a total of $87.5 million on legal costs and settlements.[10] The company is unable to accurately predict the future cost of these lawsuits, but is insured for damages and in 2007 set aside a $390 million pre-tax provision to account for future claims through 2017.[11] While most cases are handled by settlements out of court, in May of 2008, Crane paid $3.9 million dollars for a verdict in one case.[12] The company has observed a decrease in the number of new cases.[13]

Decreasing Popularity of Recreational Vehicles (RVs)

Crane sells fiberglass materials for recreational vehicles, such as high-gloss exterior paneling. Demand for recreational vehicles fell by 9% in 2007, resulting in smaller demand for crane's fiberglass materials for RV construction and maintenance.[14] The fall in RV demand was largely the result of rising oil and gas prices.

Aerospace and Electronics Segment is Affected by Aerospace Industry Cyclicality

23% of Crane's revenue in 2007 came from its Aerospace and Electronics segment. [15] The segment's revenue was up 11% or $63MM for the year due to increase in new commercial airline construction, led by the Airbus A400M and the Boeing 787. Since these two aircraft type are new, however, the company's engineering costs increased by 70%, reducing the company's operating margin for this company from 17.5% to 13.5%.[16] The aerospace industry continued to report strong sales in 2008, with Boeing showing a better-than-expected 43% increase in sales year-over-year for Q1, and sticking to a new release schedule for the 787.[17] Crane supplies only particular airplane components, not completed aircraft.


Because Crane produces products for several different markets, it has different competitors in each of these markets, as well as competition from other industrial conglomerates that cover several markets. Some major competitors include Dover (DOV), which competes in the fluid handling industry; Honeywell International (HON), which competes with Crane in control and sensing systems, as well as airplane components; and Tyco International (TYC), which produces aircraft control mechanisms to compete with Crane. Flowserve (FLS), a company focused on fluid control systems, is also a competitor for Crane.

The following table shows a comparison of some of Crane's competitors:[18]

Company Net Income Margin 2007 Revenue Growth 2007 Revenues
Crane Company (CR) -2.4% 16.1% $2.6 billion
Dover Corporation (DOV) 9.0% 14.2% $7.2 billion
Honeywell International (HON) 7.1% 10.3% $34.6 billion
Tyco International (TYC) -9.3% 8.3% $18.8 billion
Flowserve (FLS) 6.8% 22.9% $3.8 billion

In general, Crane faces the most competition in fluid handling, where many other large companies are participating in the market. [19]


  1. CR 2007 Annual Report, page 3.
  2. Crane Company - Company Update, Lehman Brothers, February 22, 2008.
  3. CR 2007 10-K, Management's Discussion and Analysis of Financial Condition and Results of Operations, page 24.
  4. CR 2007 Annual Report, pages 2-3.
  5. CR 2007 10-K, Selected Financial Data, page 17.
  6. CR 2007 10-K, Selected Financial Data, page 20.
  7. CR 2007 10-K, Management’s Discussion and Analysis of Financial Condition and Results of Operations, page 21.
  8. CR 2007 10-K, Management’s Discussion and Analysis of Financial Condition and Results of Operations, page 25.
  9. CR 2007 10-K, Business, page 7.
  10. CR 2007 10-K, Financial Statements and Supplementary Data, pages 48-49.
  11. CR 2007 10-K, Risk Factors, page 11.
  12. Asbestos Verdict Upheld by California Court of Appeals, Announces Baron & Budd, BNET, May 16, 2008.
  13. CR 2007 10-K, Management’s Discussion and Analysis of Financial Condition and Results of Operations, page 18.
  14. CR 2007 10-K, Management’s Discussion and Analysis of Financial Condition and Results of Operations, page 21.
  15. CR 2007 10-K, Item 7, pg 22
  16. CR 2007 10-K, pg 27
  17. Boeing's a Buy, Motley Fool, April 24, 2008.
  18. Companies' respective 10-K reports
  19. CR 2007 10-K, page 3.
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