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    CR
    Earnings call· Jun 2026(Q2 FY26)

    Crane Q2 FY26 earnings call CR

    Jul 29, 2026 Source

    Executive summary

    Crane Company Q2 FY26 — Record Results Driven by Strong Execution and Acquisition Outperformance

    Crane Company delivered record Q2 FY26 results, driven by strong execution, 5% core sales growth, and significant operating leverage. Acquisitions are outperforming expectations, leading to an increased full-year EPS outlook. While Process Flow Technologies saw a slight core sales decline, sequential backlog growth and strengthening demand trends position it for a strong second half, complementing the robust performance in Aerospace & Advanced Technologies.

    Highlights

    5

    • Record second quarter results with solid 5% core sales growth.

    • Total company adjusted operating margin expanded 180 basis points to a record 21.3%.

    • Total backlog increased 5% sequentially, with core sequential backlog growth across both segments.

    • Aerospace & Advanced Technologies delivered 13% core sales growth and record backlog of nearly $1.3 billion.

    • Acquisitions are performing ahead of plan, now expected to contribute $0.20 per share to full-year earnings, up from $0.15.

    Concerns

    3

    • Process Flow Technologies core sales were down 1.4% in Q2 FY26.

    • Adjusted segment margin for AAT was down slightly to 25.8% from 26.6% YoY due to dilutive impact from Druck acquisition.

    • Core FX-neutral backlog at PFT decreased 2% compared to prior year.

    Guidance & targets

    8
    CategoryTargetConfidence
    Acquisition contribution to full-year EPS
    $0.20 per share
    medium materiality
    High
    Full-year adjusted EPS
    $6.85 to $7.05 per share
    high materiality
    High
    AAT Full-year core sales growth
    just above the high end of 7% to 9% range
    medium materiality
    High
    PFT Full-year core sales growth
    flat to up to low single digits
    medium materiality
    High
    Full-year corporate expense
    $80 million to $85 million
    low materiality
    High
    Full-year net nonoperating expense
    approximately $58 million
    low materiality
    High
    Full-year tax rate
    approximately 23%
    low materiality
    High
    Q3/Q4 FY26 cadence
    Q3 similar to Q2, Q4 modestly lower
    low materiality
    High

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    Aerospace & Advanced Technologies
    Led the way with strong core sales growth and record backlog. Demand remains very strong across commercial aerospace and defense. Adjusted margin was slightly down YoY due to dilutive impact from Druck acquisition, but still outstanding.
    Core sales growth: 13.3%Total sales growth: 31%Adjusted segment margin: 25.8%Record backlog: nearly $1.3 billionCore backlog growth YoY: 11%Core backlog growth sequential: 7%Core orders growth YoY: 5%Aftermarket sales growth: 8%
    		$339 million13.3% (core sales)—25.8%
    Process Flow Technologies
    Core sales were down, but acquisitions added nearly 22 points of growth. Adjusted operating margin improved 80 bps YoY, inclusive of dilutive impact from acquisitions. Sequential backlog and orders showed improvement, positioning for H2 growth.
    Core sales growth: -1.4%Total sales growth: 21%Adjusted operating margin: 22.2%Core FX-neutral backlog decrease YoY: 2%Core FX-neutral backlog growth sequential: 2%Core FX-neutral orders: approximately flat
    		$386 million-1.4% (core sales)—22.2%

    Operational metrics

    12
    Total sales growth
    26%vs last year
    Q2 FY26

    Driven by ongoing strength in Aerospace and Advanced Technologies segment.

    Adjusted operating profit growth
    37%
    Q2 FY26

    Reflecting higher core sales, acquisition contribution, productivity, and favorable pricing net of inflation.

    Core orders growth
    2%year-over-year
    Q2 FY26

    Orders and backlog across acquisitions were solid, supporting a stronger full-year outlook.

    Debt repayment
    $100 million
    Q2 FY26

    Repaid in the quarter, with additional repayment subsequent to quarter end.

    Pro forma net leverage
    1.2xvs target 2-3x
    current

    Very strong balance sheet that positions well for further M&A. Target leverage range is 2x to 3x.

    Corporate expense
    $19 million
    Q2 FY26

    As expected.

    Net nonoperating expense
    $17 million
    Q2 FY26

    As expected.

    Commercial aftermarket revenue run rate
    $55 million to $60 million
    per quarter

    Expected for the balance of the year and entering next year.

    Commercial aftermarket growth profile
    mid-single-digit to upper mid-single-digit
    future

    Expected growth profile for commercial aftermarket.

    Missile program content
    $35 million
    current

    Content across missile programs, including Patriot and Tomahawk. No capacity constraints to supply demand.

    PFT Chemical market margins
    above average
    future

    Expected to be accretive and drive stronger leverage (above 30-35%) as markets recover, particularly in the Americas.

    PFT leverage target
    30% to 35%
    FY26

    Core growth expected to leverage within this targeted range.

    Industry KPIs

    4
    MetricValueDetails
    Tariff cost impactexcluded
    Parts aftermarket business8%%
    Incremental margin operating leverage180 basis pointsbps
    Order backlog order intake by segmentnearly $1.3 billionUSD

    Orderbook & backlog

    4
    Total backlogincreased 5% sequentiallyQ2 FY26

    up 5% sequentially

    Core sequential backlog growth across both segments.

    Total core FX-neutral backlogup 7%Q2 FY26

    up 7% YoY

    Compared to Q2 FY25.

    Aerospace & Advanced Technologies backlognearly $1.3 billionQ2 FY26

    up 11% core YoY; up 20% including Druck; up 7% core sequential

    Record level.

    Process Flow Technologies core FX-neutral backlogdecreased 2% YoY, improved 2% sequentialQ2 FY26

    down 2% YoY; up 2% sequential

    Second consecutive quarter of sequential core backlog growth.

    Deals & partnerships

    1
    Panametrics, Druck, Reuter-Stokes, optekFour acquired businesses, integration ahead of plan, exceeding expectations, realizing synergies faster than anticipated.

    These acquisitions are becoming some of Crane's best and most profitable businesses ahead of schedule, leveraging the Crane business system.

    Risks & headwinds

    3
    Dilutive impact of recent acquisitions (Druck, Panametrics, Reuter-Stokes, optek) on segment operating marginsQ2 FY26

    AAT adjusted segment margin down slightly to 25.8% from 26.6% YoY; PFT adjusted operating margin of 22.2% was inclusive of dilutive impact (AAT ~100bps, PFT ~160bps if excluding dilution).

    Mitigation: Acquisitions are performing better than expected, and core underlying business is also performing better.

    Market headwinds in Process Flow TechnologiesQ2 FY26, but expected to improve in H2 FY26

    Core sales down 1.4% in Q2 FY26; core FX-neutral backlog decreased 2% YoY.

    Mitigation: Sequential backlog growth, strengthening orders, increased quote activity, and positive demand trends in chemical production, industrial power, and cryogenics are expected to drive positive core growth in H2 FY26.

    Inflation headwinds from current conflict in the Middle East, impacting freight and aviationQ2 FY26 and ongoing

    Increased aviation that we're seeing in freight and other areas.

    Mitigation: Teams were able to quickly get ahead of this, driving margin expansion even with increased inflation.

    What to watch in Q3 FY26

    5

    Process Flow Technologies core sales growth

    H2 FY26
    Current-1.4% YoY in Q2 FY26
    TargetPositive year-over-year growth

    Why it matters

    Verifies the expected turnaround and strengthening demand trends in the PFT segment, crucial for overall company growth.

    I expect PFT to turn positive growth year-over-year in the second half. Very confident about that with those trends.

    Q&A highlights

    6

    Inquired about the evolution of organic growth in PFT through the quarter and expectations for H2.

    Alex Alcala stated strong positive sentiment for PFT in H2, citing two quarters of sequential backlog improvement, strengthening orders, increased quote activity, and positive demand trends in chemical production (Americas), industrial power, and cryogenics. Expects positive year-over-year core growth in H2.

    “I expect PFT to turn positive growth year-over-year in the second half. Very confident about that with those trends.”

    asked by Amit Mehrotra · answered by Alejandro Alcala

    2 min read6 chapters

    Detailed Narrative

    01

    Record Q2 Performance and Operating Leverage

    Crane Company achieved record second-quarter results, with total company adjusted operating margin expanding 180 basis points to a record 21.3%. This was driven by strong core margins in both segments, favorable pricing, productivity, and disciplined cost management, demonstrating the company's ability to convert growth into earnings expansion.

    02

    Acquisition Outperformance and EPS Impact

    The four recent acquisitions (Panametrics, Druck, Reuter-Stokes, optek) have performed outstandingly, with integration ahead of plan and synergies realized faster than anticipated. Their strong performance led to an increased full-year EPS contribution expectation of $0.20 per share, up from the prior $0.15 per share, highlighting the successful leverage of the Crane business system.

    03

    Aerospace & Advanced Technologies Momentum

    The AAT segment led performance with 13% core sales growth and a record backlog of nearly $1.3 billion, up 11% core year-over-year. Demand remains very strong across commercial aerospace and defense markets, with accelerating demand in power solutions for AESA radar platforms and expansion into emerging vehicle electrification programs. Full-year core sales growth for AAT is now expected to exceed the long-term 7% to 9% range.

    04

    Process Flow Technologies Recovery and Outlook

    PFT delivered a second consecutive quarter of sequential core backlog growth, improving 2% sequentially, despite core sales being down 1.4% year-over-year. Management expressed confidence in a strong second half, expecting positive year-over-year core growth driven by strengthening orders, increased quote activity, and positive demand trends in chemical production (especially Americas), industrial power, and cryogenics.

    05

    Strategic Capital Deployment and M&A Pipeline

    Crane repaid $100 million of debt in the quarter and another $90 million post-quarter, achieving a pro forma net leverage of approximately 1.2x. The company maintains a strong balance sheet and prioritizes M&A, actively evaluating opportunities that are accretive to growth, margin, and technology, with the M&A pipeline described as stronger than ever.

    06

    Missile Demand and Commercial Aftermarket

    The company currently has $35 million in content across over 10 missile programs, with customer forecasts indicating a potential 4x expansion by the end of the decade. In the commercial aftermarket, demand remains solid, with an approximate run rate of $55 million to $60 million per quarter and an expected mid-to-upper single-digit growth profile.

    AI-generated summary of the company’s earnings call. Not investment advice.