CR Q3 Deep Dive: Aerospace and Electronics Momentum Drives Upbeat Guidance

Industrial conglomerate Crane (NYSE:CR) reported Q3 CY2025 results beating Wall Street’s revenue expectations, with sales up 7.5% year on year to $589.2 million. Its non-GAAP profit of $1.64 per share was 10.3% above analysts’ consensus estimates.

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StockStory’s Take

Crane’s third quarter results were well received by the market, reflecting solid execution and strong demand in its core segments. Management attributed the company’s performance to ongoing momentum in Aerospace & Electronics, especially from new commercial and defense contracts, as well as continued operational discipline. CEO Max Mitchell highlighted “broad-based strength at Aerospace & Electronics and continued strong execution at Process Flow Technologies.” The company also benefitted from its ability to offset tariff headwinds and deliver margin expansion through a combination of pricing, productivity improvements, and a focus on higher-value product categories.

Looking forward, Crane’s raised full-year guidance is supported by expectations of continued growth in aerospace and defense markets, as well as the integration of new technology platforms. Management pointed to a record backlog and robust sales pipeline as key drivers, with COO Alejandro Alcala emphasizing confidence in sustained outperformance, noting, “Aerospace & Electronics remains poised to well outperform its markets over the next decade.” The upcoming acquisition of Precision Sensors & Instrumentation is expected to be accretive to margins and growth, and the company is preparing for additional investment in innovation and expansion into high-value end markets.

Key Insights from Management’s Remarks

Management highlighted that third quarter performance was powered by strong execution in Aerospace & Electronics, successful product launches, and resilience in targeted end markets despite industry headwinds.

• Aerospace & Electronics acceleration: Demand across commercial and defense aerospace markets remained high, with Crane winning new business and securing record backlog, particularly in brake control systems and power electronics for next-generation defense vehicles.
• Successful product launches: The introduction of a high-efficiency SyFlo wastewater pump and a 200-kilowatt traction motor inverter generator controller broadened the company’s offering and contributed to market share gains in wastewater and defense vehicle electrification.
• Resilient Process Flow Technologies: Non-chemical markets such as wastewater, pharmaceuticals, cryogenics, and power drove growth, with management citing double-digit gains in wastewater pumps and cryogenic orders supporting sectors like aerospace, space launch, and semiconductors.
• Tariff management and margin discipline: Despite $30 million in annual tariff headwinds, Crane maintained and expanded segment margins by proactively adjusting pricing and focusing on operational efficiencies.
• M&A pipeline and pending acquisition: The pending acquisition of Precision Sensors & Instrumentation (PSI) from Baker Hughes is expected to enhance Crane’s technology portfolio and financial profile, with integration planning already underway and additional M&A opportunities in the pipeline.

Drivers of Future Performance

Crane’s outlook is shaped by strong aerospace and defense demand, ongoing portfolio repositioning, and anticipated contributions from recent acquisitions.

• Aerospace & Electronics growth: Management expects continued outperformance in this segment, citing robust commercial and defense order pipelines, increased aftermarket activity, and new program wins as key growth drivers. The company believes government funding priorities and program downselections will further support this trend.
• Process Flow Technologies resilience: Growth will be led by non-chemical markets, including wastewater and pharmaceuticals, while chemical markets are seen as stabilizing with potential for gradual improvement. New product introductions and reshoring trends are expected to bolster segment performance.
• Integration of PSI acquisition: The addition of Precision Sensors & Instrumentation is projected to be accretive to both margins and revenue growth, with management confident in realizing synergies through the Crane Business System and targeting higher-value end markets like nuclear and aerospace.

Catalysts in Upcoming Quarters

Looking ahead, the StockStory team will be tracking (1) the successful integration and margin impact of the Precision Sensors & Instrumentation acquisition, (2) sustained order momentum and backlog growth in Aerospace & Electronics, and (3) continued product innovation and market share gains in Process Flow Technologies, particularly in wastewater and cryogenics. Progress on additional M&A and execution against tariff mitigation strategies will also be important markers for Crane’s path forward.

Crane currently trades at $190.76, in line with $191.33 just before the earnings. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it’s free for active Edge members).

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