Crane Q2 2025 slides reveal earnings growth and $1.06B PSI acquisition

Introduction & Market Context

Crane Co (NYSE:CR) presented its second quarter 2025 earnings results on July 29, 2025, showcasing strong financial performance across all segments and announcing a significant acquisition. The company’s stock, which closed at $190.73 on July 28, rose 0.88% in aftermarket trading to $192.40 following the presentation, building on momentum from its strong first quarter performance earlier this year.

The industrial products manufacturer continues to demonstrate resilience and growth in a challenging macroeconomic environment, with its strategic focus on aerospace, electronics, and process flow technologies yielding positive results. The company’s performance reflects both organic growth and strategic acquisitions, positioning it for continued expansion.

Quarterly Performance Highlights

Crane reported impressive second quarter results, with sales increasing 9.2% to $577.2 million compared to $528.6 million in Q2 2024. Operating profit rose 15.2% to $102.9 million, while operating margin expanded by 90 basis points to 17.8%. Earnings per share grew 20.2% to $1.37, with adjusted EPS reaching $1.49.

The company’s growth was driven by a combination of factors, including 6.5% core growth, 1.8% contribution from acquisitions, and 0.9% from favorable foreign exchange translation.

As shown in the following comprehensive financial overview:

The Aerospace & Electronics segment was particularly strong, with sales increasing 11.8% to $258.2 million and operating profit surging 28.8% to $67.9 million. Operating margin in this segment expanded significantly by 350 basis points to 26.3%. The segment’s backlog grew 29.2% to $1,052.8 million, indicating strong future revenue potential.

The segment’s performance breakdown reveals robust growth in both original equipment (9%) and aftermarket sales (18%), with the latter now representing 34% of the segment’s business:

The Process Flow Technologies segment also performed well, with sales increasing 7.2% to $319.0 million and operating profit rising 7.4% to $63.9 million. Operating margin remained steady at 20.0%. While backlog growth was modest at 0.8%, reaching $403.1 million, the company noted that core FX-neutral orders increased 4% year-over-year.

The detailed segment performance is illustrated below:

Strategic Acquisition of PSI

In a significant strategic move, Crane announced an agreement to acquire Precision Sensing and Instrumentation (PSI) from Baker Hughes (NASDAQ:BKR) for $1,060 million, net of an expected tax benefit of $90 million. PSI is a provider of mission-critical sensor-based control technologies with approximately $60 million in forecast 2025 adjusted EBITDA.

The acquisition, expected to close by January 1, 2026 pending regulatory approvals, will be financed through a combination of cash on hand and debt. This represents a major expansion of Crane’s technological capabilities and market reach.

The key details of the acquisition are outlined here:

The PSI acquisition will bring several iconic brands to Crane’s portfolio, including Druck (pressure sensors and test & calibration equipment), Reuter-Stokes (radiation and flame detectors), and Panametrics (flow meters and analyzers). These additions are expected to contribute approximately $150 million in sales to the Aerospace & Electronics segment and $150 million to the Process Flow Technologies segment.

The strategic fit of these brands within Crane’s existing business is illustrated below:

Financial Position and Capital Allocation

Crane maintains a strong financial position with approximately $1,085 million in liquidity as of July 15, 2025, including an $800 million undrawn revolver and approximately $285 million in cash. The company has zero debt, having repaid $47 million of remaining debt after the close of Q2.

Following the PSI acquisition, Crane anticipates leverage of approximately 1x, still leaving significant capacity for additional strategic moves with an expected M&A capacity of over $1.5 billion after the PSI transaction.

The company’s strong capital position is detailed here:

Updated Guidance and Outlook

Based on strong first-half performance, Crane has raised its full-year 2025 guidance. The company now expects revenue of $2,250-$2,290 million, up from the previous guidance of $2,230-$2,270 million. Adjusted EPS guidance has been increased to $5.50-5.80, compared to the prior range of $5.30-5.60.

Crane continues to expect adjusted segment operating margin of 22.5%+ and free cash flow conversion of 90-100%. The company projects core sales growth of 4-6%, with additional contributions of approximately 1% from favorable foreign exchange and 1-2% from acquisitions including CryoWorks and Technifab.

The updated guidance is summarized in the following table:

Crane’s long-term strategy focuses on four key pillars: solid organic growth of 4-6%, a disciplined approach to acquisitions requiring 10% ROIC by year 5, continued margin expansion through superior products and operational excellence, and maintaining a strong balance sheet to support capital deployment strategies.

The company’s strategic framework is illustrated below:

Forward-Looking Statements

While Crane’s presentation paints an optimistic picture, investors should note that forward-looking statements are subject to various risks and uncertainties, including economic conditions, geopolitical risks, supply chain issues, and competition. The company’s ability to achieve the projected benefits from the PSI acquisition will depend on successful integration and market conditions.

Nevertheless, Crane’s strong Q2 2025 performance, coupled with its strategic acquisition and solid financial position, suggests the company is well-positioned for continued growth. The significant backlog in the Aerospace & Electronics segment and the strategic addition of PSI’s iconic brands provide a foundation for future expansion in high-value markets.

The raised guidance for full-year 2025 reflects management’s confidence in the company’s trajectory, building on the momentum established in the first half of the year. With its disciplined approach to growth and capital allocation, Crane appears poised to deliver continued value to shareholders in the coming quarters.

Full presentation:

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