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.  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. Nevertheless, price increases in 2006 and sales from companies acquired in 2006 led to a net increase in revenue for the engineered materials segment.
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.
The company has five business segments: 
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. 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%.
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.
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. 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. 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. The company has observed a decrease in the number of new cases.
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. The fall in RV demand was largely the result of rising oil and gas prices.
23% of Crane's revenue in 2007 came from its Aerospace and Electronics segment.  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%. 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. 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:
|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.