Key Takeaways CRS posted record Q2 operating income as revenues rose 7.5% and adjusted EPS increased year over year.Carpenter Technology raised FY26 operating income guidance to $680-$700M, signaling strong profit momentum.CRS saw strength in aerospace and defense, while medical and distribution end markets faced pressure.Carpenter Technology Corporation (CRS) reported solid second-quarter fiscal 2026 results, delivering year-over-year increases in its top and bottom lines. CRS’ shares have surged 92.4% ove ...

Shares of Carpenter Technology (CRS) have been strong performers lately, with the stock up 11.1% over the past month. The stock hit a new 52-week high of $370.59 in the previous session. Carpenter has gained 16% since the start of the year compared to the 16.3% move for the Zacks Basic Materials sector and the 18.3% return for the Zacks Steel - Speciality industry.What's Driving the Outperformance?The stock has a great record of positive earnings surprises, having beaten the Zacks Consensus Estimate in eac ...

Investors interested in stocks from the Steel - Speciality sector have probably already heard of Insteel Industries (IIIN) and Carpenter Technology (CRS) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate ...

Key Takeaways CRS delivered Q2 adjusted EPS of $2.33, beating estimates and rising sharply from the prior-year quarter.Revenues rose 7.5% y/y to $728M, driven by strength in the Aerospace, Defense and Energy markets.Carpenter Technology posted record adjusted operating income of $155M as margins expanded to 21.3%.Carpenter Technology Corporation (CRS) reported adjusted earnings of $2.33 per share for second-quarter fiscal 2026, beating the Zacks Consensus Estimate of $2.20. It had posted adjusted earnings o ...

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Core Insights - Carpenter Technology reported record profitability for its fiscal 2026 second quarter, driven by pricing momentum, expanding margins, and strengthening demand, particularly in aerospace and defense [3][6][18] Financial Performance - Total company sales excluding raw material surcharge increased by 8% year-over-year but decreased by 2% sequentially, attributed to typical year-end factors [1] - The company generated $155 million in operating income for the quarter, a 31% increase compared to the previous quarter [2][6] - Gross profit rose to $218.3 million, reflecting a 23% year-over-year increase [8] Segment Performance - Specialty Alloys and Operations (SAO) segment achieved an adjusted operating margin of 33.1%, up from 28.3% a year earlier [2] - Aerospace and defense sales were down 1% sequentially but up 15% year-over-year, with bookings increasing by 8% sequentially and commercial aerospace bookings up 23% [7] - Medical sales declined by 7% sequentially and 22% year-over-year, primarily due to reduced demand for specific titanium products [7] - Energy sales decreased by 10% sequentially but increased by 19% year-over-year, driven by power generation demand [7] Cash Flow and Capital Allocation - The company generated $132.2 million from operations and $85.9 million in adjusted free cash flow for the quarter [4][11] - Carpenter repurchased $32.1 million of stock, totaling $183.1 million under a $400 million program [12] - Total liquidity at quarter-end was $730.8 million, including $231.9 million in cash [13] Market Dynamics and Guidance - Management noted strengthening demand in aerospace and defense, with bookings up 8% sequentially and constrained nickel-based superalloy supply [5][16] - The company raised its full-year fiscal 2026 operating income guidance to $680 million to $700 million, representing a 30% to 33% increase over fiscal 2025 [18]

Financial Performance - Net sales for the three months ended December 31, 2025, increased to $728.0 million, up 7.9% from $676.9 million in the same period of 2024[11] - Gross profit for the six months ended December 31, 2025, rose to $434.7 million, representing a 22.8% increase compared to $353.8 million in 2024[11] - Operating income for the three months ended December 31, 2025, was $155.2 million, a 30.6% increase from $118.9 million in the prior year[11] - Net income for the six months ended December 31, 2025, reached $227.8 million, up 34.7% from $168.9 million in 2024[14] - For the three months ended December 31, 2025, net income was $105.3 million, an increase of 25.7% compared to $84.1 million in the same period of 2024[49] - Basic earnings per common share for the three months ended December 31, 2025, was $2.10, up 25.0% from $1.68 in 2024[49] - Consolidated operating income for the three months ended December 31, 2025, was $155.2 million, compared to $118.9 million in the same period of 2024, marking an increase of 30.6%[105] - Segment operating income for the six months ended December 31, 2025, was $361.5 million, compared to $284.5 million in 2024, reflecting a significant increase of 27.1%[107] - Consolidated operating income rose to $308.6 million for the six months ended December 31, 2025, compared to $232.5 million in 2024, marking an increase of 32.7%[107] Assets and Liabilities - Cash and cash equivalents decreased to $231.9 million as of December 31, 2025, from $315.5 million at the end of June 2025[9] - Total assets increased to $3,504.3 million as of December 31, 2025, compared to $3,486.8 million as of June 30, 2025[9] - Total liabilities decreased to $1,518.9 million as of December 31, 2025, down from $1,599.8 million at the end of June 2025[9] - Total accrued liabilities decreased to $142.7 million as of December 31, 2025, from $216.3 million as of June 30, 2025[52] - The carrying value of long-term debt was $690.1 million as of December 31, 2025, with a fair value of $713.0 million[72] Cash Flow and Investments - Net cash provided from operating activities for the six months ended December 31, 2025, was $171.4 million, an increase from $108.1 million in 2024[16] - The company plans to continue investing in property, plant, and equipment, with purchases amounting to $88.9 million for the six months ended December 31, 2025[16] - Capital expenditures for the six months ended December 31, 2025, totaled $88.9 million, up from $56.2 million in 2024, indicating a 58.2% increase[111] Shareholder Returns - Cash dividends declared were $0.40 per share, totaling $20.1 million for the six months ended December 31, 2025[20] - The company authorized a share repurchase program of up to $400.0 million for its outstanding common stock, with $216.9 million remaining available for future purchases as of December 31, 2025[68] - During the six months ended December 31, 2025, the company repurchased 300,000 shares for an aggregate of $81.2 million[68] Revenue by Sector - Revenue from the Aerospace and Defense sector for the three months ended December 31, 2025, was $472.0 million, up from $413.4 million in 2024, reflecting a growth of approximately 14.1%[44] - Revenue from the Medical sector for the three months ended December 31, 2025, was $70.7 million, down from $86.3 million in 2024, indicating a decline of approximately 18.0%[44] - The SAO segment reported sales of $659.3 million for the three months ended December 31, 2025, an increase from $597.8 million in 2024, representing a growth of 10.3%[105] - The PEP segment reported sales of $68.7 million for the three months ended December 31, 2025, down from $79.1 million in 2024, reflecting a decline of 13.9%[105] Accounting and Compliance - The company is currently evaluating the potential impact of the adoption of ASU 2025-06 on its consolidated financial statements and related disclosures[31] - The Company expects to adopt ASU 2025-09 and ASU 2025-12, which are effective for fiscal years beginning after December 15, 2026, but the impact on financial statements is still being evaluated[32][33] - The Company adopted ASU 2023-07 in Q4 of fiscal year 2025, which requires additional disclosures about reportable segment expenses but did not materially impact consolidated financial statements[34] Environmental and Legal Matters - The company recorded environmental remediation liabilities of $17.5 million as of December 31, 2025, slightly up from $17.4 million as of June 30, 2025[65] - The company is exposed to potential future costs related to environmental remediation, which may not materially affect long-term financials but could impact specific future quarters[66] - The company has been involved in various routine claims and legal actions, but management believes these will not have a material effect on long-term financials[67] Derivative Instruments and Risk Management - The company has derivative financial instruments with a fair value of $0.2 million in assets and $1.2 million in liabilities as of December 31, 2025[71] - The company has forward contracts to purchase 0.2 million pounds of certain raw materials with settlement dates through January 2027[78] - The company reported a total liability from derivative contracts of $1.2 million as of December 31, 2025[82] - The company does not anticipate nonperformance by any counterparties on its derivative instruments, supported by master netting arrangements[84] - The company has historically used commodity forward contracts, interest rate swaps, and foreign currency forwards to manage risks associated with price fluctuations[77]

Financial Performance - Operating income for Q2 FY26 reached $155.2 million, a 31% increase year-over-year from $118.9 million in Q2 FY25[11]. - Net sales for Q2 FY26 were $728.0 million, up 7.5% from $676.9 million in Q2 FY25, with net sales excluding surcharge revenue at $589.1 million, a 7.5% increase year-over-year[23]. - Adjusted operating margin for Q2 FY26 was 26.3%, up from 21.7% in Q2 FY25, marking the sixteenth consecutive quarter of margin expansion[23]. - Q2 profits increased by 31% year-over-year, with adjusted operating margins now at 33.1%[45]. - FY26 operating income expected to be 30% to 33% higher than record FY25, indicating continued earnings growth[45]. - Adjusted earnings per diluted share excluding special items for Q2-26 was $2.33, compared to $1.66 in Q2-25[52]. Cash Flow and Capital Allocation - The company generated $132.2 million in cash from operating activities and expects to generate at least $280 million of adjusted free cash flow in fiscal year 2026[34]. - The company repurchased $32.1 million of stock in the current quarter, totaling $183.1 million against a $400.0 million authorization[34]. - Adjusted free cash flow expected to be at least $280 million in fiscal year 2026[42]. - Adjusted free cash flow for Q2-26 was $85.9 million, compared to $51.9 million in the same period last year[53]. - Strong balance sheet and cash flow generation enable balanced capital allocation, including dividends and share repurchase programs[45]. Market and Segment Performance - Aerospace and Defense segment saw a 23% sequential increase in bookings, driven by ramping production rates and elevated MRO activity[15]. - Net sales in the Aerospace and Defense segment increased by 60.1% year-over-year, contributing significantly to overall revenue growth[24]. - The company completed negotiations for three additional aerospace long-term agreements (LTAs) with significant pricing increases, indicating strong pricing power in the current market[39]. - Aerospace industry targeting build rate increase of ~50% over 2025 rate and ~35% over pre-COVID high[42]. - Anticipated strengthening in volume, productivity, and favorable pricing actions due to supply-demand imbalance[45]. Future Outlook - Q3 FY26 operating income is expected to be in the range of $195 million to $200 million, reflecting strong demand and productivity efforts[27]. - Management expects FY27 not to be the peak of earnings growth, with market dynamics strengthening[45]. - The effective tax rate for Q2 FY26 was 19.0%, compared to 20.0% in Q2 FY25[23].

Carpenter Technology (CRS) reported $728 million in revenue for the quarter ended December 2025, representing a year-over-year increase of 7.6%. EPS of $2.33 for the same period compares to $1.66 a year ago.The reported revenue represents a surprise of -0.08% over the Zacks Consensus Estimate of $728.57 million. With the consensus EPS estimate being $2.20, the EPS surprise was +5.79%.While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to ...

Carpenter Technology (NYSE:CRS) Q2 2026 Earnings call January 29, 2026 10:00 AM ET Company ParticipantsJohn Huyette - Head of Investor RelationsTimothy Lain - SVP and CFOTony Thene - Chairman and CEOConference Call ParticipantsAndre Madrid - AnalystBennett Moore - AnalystGautam Khanna - AnalystJosh Sullivan - Managing Director and Senior Equity Research AnalystPhil Gibbs - AnalystScott Deuschle - AnalystOperatorLadies and gentlemen, thank you for standing by. My name is Desiree, and I will be your conferenc ...