Executive Summary

Q1 2025 was a clean beat on both EPS and revenue: adjusted EPS $1.39 vs S&P Global consensus $1.31*, and revenue $557.6M vs $547.9M*; GAAP EPS was $1.34. Management reaffirmed FY25 adjusted EPS guidance of $5.30–$5.60 despite tariff and macro uncertainty, citing solid demand and pricing/productivity offsets . S&P Global estimates used for consensus.
Aerospace & Electronics (A&E) led with 10% sales growth, record 26.0% adjusted segment margin (+360 bps YoY), and record $960M backlog; Process Flow Technologies (PFT) grew 9% with 20.9% adjusted margin and 35% core operating leverage .
Orders/backlog trajectories remain constructive: core orders +15.6% and core backlog +12.1% YoY; total backlog rose to $1.35B (+9% QoQ), providing visibility, including multiyear defense orders benefitting 2026 .
Key swing factors: potential tariff impact (gross ~$60M) expected to be substantially mitigated by ~3% price and productivity; management guided Q2 EPS “slightly down” sequentially, with 1H/2H more evenly weighted for the year .

What Went Well and What Went Wrong

What Went Well
- A&E outperformance with record profitability and strong aftermarket: A&E adjusted operating margin hit 26.0% (+360 bps YoY), with aftermarket up ~20% and OEM up ~6% (commercial +10%, military +1%) .
- Broad-based demand and visibility: core orders +16% and core backlog +12% YoY, with defense multiyear awards and Boeing/Airbus/COMAC build support; total backlog reached $1.35B .
- Pricing/productivity offsetting costs: company delivered ~7.5% core sales growth and 18% adjusted operating profit growth; price expected to contribute ~3% in FY25, more weighted to PFT, helping offset tariffs .
What Went Wrong
- Tariff and macro uncertainty: management flagged gross tariff headwind of ~$60M (in-year COGS) if sustained, offset “substantially” by price/productivity; outlook reaffirmed but upside seen as more macro-dependent .
- PFT project timing and regional softness: chemical projects in the Americas could “shift to the right” amid tariff uncertainty; Europe and China were softer, even as the Middle East/Américas remained constructive .
- Seasonal cash usage: free cash flow was negative ($60.4M) in Q1 on normal seasonality; adjusted FCF was -$58.2M .

Financial Results

Headline results vs estimates and prior quarters

Metric	Q3 2024	Q4 2024	Q1 2025
Revenue ($M)	$597.2	$544.1	$557.6
GAAP EPS ($)	$1.33	$1.20	$1.34
Adjusted EPS ($)	$1.38	$1.26	$1.39
Operating Margin (GAAP)	17.6%	15.8%	18.1%
Adjusted Operating Margin	18.3%	17.7%	18.7%
Adjusted EBITDA Margin	20.3%	19.8%	20.8%

Q1 2025 vs S&P Global consensus

Metric	Consensus	Actual
Revenue ($M)	$547.9*	$557.6
Primary EPS ($)	$1.305*	$1.39
# of Estimates	6 (EPS), 6 (Rev)*	—

Values with asterisk (*) retrieved from S&P Global.

Segment breakdown

Segment	Q1 2024	Q4 2024	Q1 2025
A&E Sales ($M)	$225.9	$236.8	$248.9
A&E Adjusted Op Margin (%)	22.4%	23.1%	26.0%
PFT Sales ($M)	$284.3	$307.3	$308.7
PFT Adjusted Op Margin (%)	20.8%	20.3%	20.9%

KPIs and balance sheet

KPI	Q4 2024	Q1 2025
Total Backlog ($M)	$1,240.2	$1,350.0
A&E Backlog ($M)	$863.8	$960.1
PFT Backlog ($M)	$376.4	$389.9
Core Orders Growth YoY	—	15.6%
Core Backlog Growth YoY	—	12.1%
Free Cash Flow ($M)	—	-$60.4
Adjusted Free Cash Flow ($M)	—	-$58.2
Cash & Equivalents ($M)	$306.7	$435.1
Total Debt ($M)	$247.0	$247.1

Non-GAAP note: Adjusted EPS (+$0.05 in Q1) excludes transaction-related expenses, repositioning charges, and pension non-service costs (with associated tax effects) per company reconciliations .

Guidance Changes

Metric	Period	Previous Guidance (Jan 27, 2025)	Current Guidance (Apr 28, 2025)	Change
Adjusted EPS	FY 2025	$5.30–$5.60	$5.30–$5.60	Maintained
Total Sales Growth	FY 2025	~5%	~5%	Maintained
Core Sales Growth	FY 2025	~4%–6%	~4%–6%	Maintained
Adjusted Segment Operating Margin	FY 2025	22.5%+	22.5%+	Maintained
Corporate Cost	FY 2025	~$80M	~$80M	Maintained
Net Non-Operating Expense	FY 2025	~$10M	~$10M	Maintained
Adjusted Tax Rate	FY 2025	~23.5%	~23.5%	Maintained
Diluted Shares	FY 2025	~59M	~59M	Maintained
Dividend/Share	Q2 2025	—	$0.23 declared	Announced

Management added that Q2 earnings should be “slightly down” sequentially, with the full year more equally weighted between 1H and 2H .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3’24, Q4’24)	Current Period (Q1’25)	Trend
Tariffs/Macro	Not a major topic in Q3’24 PR; Q4’24 PR focused on execution and 2025 guide	Gross ~$60M tariff impact expected if sustained; company plans ~3% price and productivity to substantially mitigate	New headwind; mitigation plan in place
A&E Demand/Backlog	A&E backlog $833M in Q3’24 (+YoY), margins expanding	A&E sales +10% YoY; record 26% adj margin; backlog $960M (+21% YoY, +11% seq)	Strengthening with record profitability/backlog
Commercial Aftermarket	Strong in Q3/Q4	Aftermarket +~20% (+19% commercial, +24% military); 16th straight quarter of double-digit growth; expected to moderate on tougher comps	Still strong; growth rate to normalize
Boeing/Airbus/COMAC	Boeing ramp supportive in prior quarters	Boeing ramp continues; COMAC C919 deliveries on track, 929 development progressing	Positive execution tailwinds
PFT Orders/Projects	Growth and M&A adds (CryoWorks/Baum) in Q3; strong Q4 margins	Orders a bit ahead of plan; some Americas chemical projects could shift right; Europe/China softer; Middle East/Americas constructive	Mixed: underlying resilience with project timing risk
Cryogenics Platform	Acquisitions driving growth in Q3/Q4	Fastest-growing PFT segment; notable wins with space-launch customers	Continued outperformance
Pricing/Cost	Price gains and productivity drove margins in Q3/Q4	~3% FY25 price contribution expected, more weighted to PFT, to offset tariffs	Ongoing positive price/mix
M&A Pipeline	Active, acquisitions completed/announced in 2024	“Very active” with at least ~$1.5B capacity; due diligence ongoing; hopeful for 2025 announcements	Potential inorganic catalyst

Management Commentary

CEO Max Mitchell: “We delivered a very strong start to 2025… 24.1% adjusted EPS growth driven by 7.5% core sales growth and strong operating leverage… demand trends… solid… with 15.6% YoY core order growth and 12.1% YoY core backlog growth” .
COO Alex Alcala on tariffs: “About 7%–8% of COGS are direct imports… total China exposure well below 3% of Crane’s total cost of goods… we expect to offset the majority of the potential tariff impact through price and productivity” .
CFO Rich Maue: “Adjusted operating profit increased 18%… A&E adjusted segment margin of 26%, a record high… we are in a net cash position and have more than $1.5B in debt capacity today for M&A” .

Q&A Highlights

Tariffs and pricing: gross in-year COGS impact around ~$60M if sustained; company expects to substantially mitigate via ~3% pricing and productivity (pricing skewed to PFT) .
A&E profitability sustainability: Q1 benefited from strong mix and engineering program completions; no fundamental weakening expected, though comps moderate; A&E growth split ~50/50 price vs volume .
Demand cadence: Q2 expected “slightly down” vs Q1; full year more equally weighted 1H/2H .
PFT end-markets: Americas/Middle East constructive; Europe and China softer; some chemical projects likely shift right due to uncertainty .
Backlog quality: multiyear defense orders add 2026 visibility; commercial build rates across Boeing/Airbus/COMAC supportive .

Estimates Context

Beat vs S&P Global consensus: Q1 2025 adjusted EPS $1.39 vs $1.305*; revenue $557.6M vs $547.9M*. Number of covering estimates: 6 for EPS and 6 for revenue*. Company cited confidence to reaffirm FY25 EPS guidance despite macro/tariff uncertainty .
Values with asterisk (*) retrieved from S&P Global.

Implication: Street likely lifts A&E margin trajectory and backlog-driven visibility; modest risk of trimming PFT near-term project assumptions in chemicals (timing) and smoothing quarterly cadence per management’s “slightly down” Q2 comment .

Key Takeaways for Investors

Clear beat on EPS/revenue with record A&E margin and record A&E backlog; order momentum supports multi-quarter visibility .
Guidance intact at $5.30–$5.60 FY25 despite tariff/macro—execution confidence plus pricing/productivity offsets; watch for tariff developments and potential easing as upside .
Near-term cadence: management flagged Q2 slightly down sequentially; expect a more balanced 1H/2H; trading setups should account for quarterly normalization .
PFT resilient but mixed: strong cryogenics/water/wastewater offset by chemical project timing and Europe/China softness; monitor orders mix and price-cost .
Aftermarket still a tailwind (16th straight quarter of double-digit growth) but growth rate likely moderates on comps; nonetheless, aging fleet supports durable demand .
M&A optionality meaningful (≥$1.5B capacity) with active pipeline in both segments—potential catalysts through 2025 .
Balance sheet strength (cash $435M; debt $247M) supports organic/inorganic investment and dividend continuity ($0.23 declared for Q2) .

Note: Where consensus figures are shown with an asterisk (*), values are retrieved from S&P Global.

Citations: Press release Q1 2025 ; Earnings call transcript Q1 2025 ; Q4 2024 press release ; Q3 2024 press release .

Crane Co (CR)·Q1 2025 Earnings Summary