Crane NXT Reports 5.3% Sales Increase but 32.7% Drop in Operating Profit in Q1 2025

Crane NXT, Co. reported a net sales increase of 5.3% for the first quarter of 2025, reaching $330.3 million compared to $313.6 million in the same period last year. The company's operating profit, however, decreased by 32.7% to $37.3 million, down from $55.4 million in the prior year. This decline in profitability was attributed to increased costs associated with the recent acquisition of OpSec Security, which contributed $33.4 million to sales but also added significant operational expenses. Net income attributable to common shareholders fell to $21.7 million, a decrease of 42.6% from $37.8 million in the first quarter of 2024.

The financial performance reflects several significant changes compared to the previous fiscal period. Operating costs rose sharply, with cost of sales increasing by 17.9% to $190.1 million, driven primarily by the OpSec acquisition and under absorption of manufacturing overhead in the Currency business. Selling, general, and administrative expenses also rose by 9.1% to $102.9 million, influenced by the integration of OpSec. The effective tax rate for the quarter increased to 22.7%, up from 19.0% in the prior year, primarily due to a shift in the mix of non-U.S. earnings.

In terms of strategic developments, Crane NXT completed the acquisition of OpSec Security on May 3, 2024, for $270 million, which has been integrated into its Security and Authentication Technologies segment. This acquisition is expected to enhance the company's capabilities in providing authentication solutions and brand protection. Additionally, on May 1, 2025, Crane NXT announced the acquisition of De La Rue Authentication Solutions for £300 million, further expanding its portfolio in security technologies.

Operationally, Crane NXT reported a total of 57,365,810 shares outstanding as of April 30, 2025. The company’s two reportable segments, Crane Payment Innovations and Security and Authentication Technologies, showed varied performance. The Crane Payment Innovations segment experienced a decline in sales, while the Security and Authentication Technologies segment saw a significant increase in sales, largely due to the OpSec acquisition. The company also reported a total of $547.8 million in remaining performance obligations, with expectations to recognize approximately 76% of this as revenue in 2025.

Looking ahead, Crane NXT anticipates that it will be able to offset the impact of tariffs and other trade measures through pricing and productivity initiatives. However, the company acknowledges the uncertainty surrounding market conditions and customer demand, which could affect future revenue and profitability. The management remains focused on integrating recent acquisitions and optimizing operational efficiencies to enhance financial performance in the coming quarters.