Crane (NYSE:CR) reported record third-quarter performance for 2026, citing broad-based demand, operating execution and contributions from recent acquisitions. The company raised its full-year adjusted earnings outlook to $7.23 to $7.38 per share, an increase of $0.35 at the midpoint from its prior forecast.
President and CEO Alex Alcala said the company generated 8% core sales growth, record earnings and a record backlog during the quarter. Total company backlog increased 9% year over year, while core orders rose 11%, led by a 20% increase in Process Flow Technologies orders.
“Demand remains very strong across Aerospace & Advanced Technologies,” Alcala said, while momentum was also building in Process Flow Technologies. He said recent acquisitions had exceeded the company’s expectations for revenue growth, margin expansion and earnings contribution.
Sales, Margins and Cash Flow
Total sales increased 28% from the prior-year quarter, including 8% core growth and a 21-percentage-point contribution from four acquisitions, according to Executive Vice President and CFO Rich Maue. Adjusted operating profit rose 36%.
Adjusted operating margin expanded 130 basis points year over year to a record 22.5%, despite what management described as temporary dilution from recent acquisitions. The company generated strong free cash flow and repaid $170 million of debt in the quarter, bringing pro forma net leverage to 1.1 times.
Maue said Crane’s adjusted results excluded a net benefit from IEEPA tariff recoveries recorded during the quarter, which the company considers a one-time item rather than an underlying operating trend.
- Total company core sales growth: 8%
- Total sales growth: 28%
- Adjusted operating profit growth: 36%
- Adjusted operating margin: 22.5%, up 130 basis points
- Core backlog growth: 9%
- Debt repaid during the quarter: $170 million
Aerospace and Defense Demand Remains Strong
Aerospace & Advanced Technologies sales rose 27% to $344 million, including 9.5% core sales growth. The segment’s backlog reached nearly $1.3 billion, up 9% on a core basis and 20% including the effect of the Druck acquisition.
Management attributed the growth to commercial original-equipment production, defense demand and continued aftermarket activity. Core commercial aftermarket revenue rose at a high-single-digit rate, while total aftermarket growth, excluding prior-year initial provisioning, was 11%.
The segment’s adjusted operating margin was 26.3%, an increase of 100 basis points from a year earlier. Crane maintained its expectation for full-year core sales growth slightly above the high end of its long-term 7% to 9% framework for the segment.
Alcala said defense customers continued to prioritize missile defense, radar, advanced power conversion and space-based capabilities. He said Crane participates in roughly 15 missile programs and expects missile-related revenue, starting from an approximately $35 million base in 2026, to grow 40% to 50% next year. Management said much of that expected demand is already reflected in backlog.
Process Flow Orders Accelerate
Process Flow Technologies sales rose 29% to $413 million, including 6.2% core growth. Acquisitions of Panametrics, Reuter-Stokes and Optek-Danulat contributed nearly 24 percentage points of sales growth.
Core orders in the segment increased 20% from a year earlier and 8% sequentially, while core backlog increased 8% year over year and 2% sequentially. The segment posted a record adjusted operating margin of 24%, up 80 basis points from the prior-year period.
Management cited broad-based activity in cryogenics, power, wastewater, nuclear, pharmaceuticals and general industrial markets. Alcala said cryogenics demand has been supported by space-launch infrastructure and aerospace factory testing, while power activity has been driven primarily by U.S. natural-gas combined-cycle turbine expansion. Pharmaceutical demand has benefited from U.S. capacity expansion and reshoring activity.
Crane now expects low-single-digit core growth and continued margin expansion in Process Flow Technologies for the full year. Management said chemical markets remain flat, particularly in Europe, but noted that the company’s portfolio has become less dependent on a chemical recovery.
Alcala said chemicals now account for about 20% of Process Flow Technologies end-market exposure, down from roughly 30% historically. Water and wastewater represent about 14% to 15%, general industrial about 20%, and gas and nuclear power combined about 15%, he said.
Portfolio Actions and Acquisition Outlook
Crane said its acquisitions are performing ahead of plan and are expected to contribute approximately $0.30 per share to 2026 earnings, up from a previous estimate of $0.20 per share. The company expects operating margins at the acquired businesses to improve by more than 500 basis points this year and said it now expects to reach its 10% return-on-invested-capital hurdle about 18 months sooner than initially anticipated.
During the question-and-answer session, Alcala said an acquired business that Crane had previously expected to increase from $60 million in EBITDA to $150 million in five years is now expected to reach that level sooner. He added that the five-year opportunity appears higher, with growth expected in a 4% to 6% range and operating leverage of 35% to 40% after the three-year mark.
The company also highlighted its pending acquisition of Trillium Pumps, which it said will strengthen its presence in water and wastewater markets. Separately, Crane is divesting its Building Services & Utilities business as part of an effort to exit nonresidential-construction exposure and focus Process Flow Technologies on engineered, mission-critical technologies.
Maue said Building Services & Utilities is expected to generate about $160 million in revenue this year at approximately company-level margins, while Trillium has about $115 million of revenue and lower margins. He said the portfolio moves would create some dilution, though Trillium is expected to offset a substantial portion of that effect during the year, assuming a closing near the end of the first quarter.
Crane plans to hold its next Investor Day on Feb. 9 in New York City.
About Crane (NYSE:CR)
Crane Company (NYSE: CR) is a diversified industrial technology company that develops and manufactures highly engineered products for aerospace, industrial, commercial and other specialized markets. The company serves customers worldwide through businesses focused on mission-critical components, systems and services.
Its Aerospace & Electronics segment supplies products such as sensing and control systems, aircraft components, power-management equipment and other electronic solutions for commercial and military aerospace applications.
