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Core Insights - Carpenter Technology (CRS) reported revenue of $733.7 million for the quarter ended September 2025, marking a year-over-year increase of 2.2% and an EPS of $2.43 compared to $1.73 a year ago, indicating strong financial performance [1] - The reported revenue exceeded the Zacks Consensus Estimate of $729.14 million by 0.63%, while the EPS surpassed the consensus estimate of $2.13 by 14.08% [1] Financial Performance Metrics - Carpenter's shares have returned +4.9% over the past month, outperforming the Zacks S&P 500 composite's +0.2% change, with a current Zacks Rank of 3 (Hold) suggesting potential alignment with broader market performance [3] - Volumes Sold in Pounds for Specialty Alloys Operations were 44.75 million, slightly below the estimated 44.94 million [4] - Total Volumes Sold in Pounds were 46.42 million, compared to the average estimate of 46.7 million [4] - Net Sales in the End-Use Market Excluding Surcharge Revenue totaled $603.1 million, exceeding the estimate of $595.69 million and reflecting a +4.5% change year-over-year [4] - Surcharge revenue was reported at $130.6 million, lower than the estimated $137.58 million, representing a -6.9% change year-over-year [4] - Operating Income for Specialty Alloys Operations was $170.7 million, surpassing the average estimate of $163.59 million [4]

Financial Data and Key Metrics Changes - The company achieved record earnings with adjusted operating income of $153 million, a 31% increase year-over-year compared to $117.2 million in Q1 FY2025 [4][15] - Adjusted operating margin for the SAO segment reached 32%, up from 26.3% a year ago and 30.5% in the prior quarter [5][17] - Earnings per diluted share was $2.43 for the quarter, marking another record for profitability [16] Business Line Data and Key Metrics Changes - SAO segment net sales excluding surcharge were $533.9 million, up 5% year-over-year but down 3% sequentially [17] - PEP segment net sales were $87.2 million, down 10% sequentially and down 6% year-over-year [19] - Aerospace and defense sales were up 1% sequentially and 11% year-over-year, with bookings accelerating by 23% over the previous quarter [9][12] Market Data and Key Metrics Changes - The aerospace supply chain is experiencing strengthening demand, particularly in the engine submarket, which saw a 14% sequential increase in sales [9][12] - Medical market sales were down 20% sequentially and 16% year-over-year, primarily due to volatility in medical distribution [10] - Energy market sales were down 5% sequentially but up 8% year-over-year, driven by increasing demand for power generation [11] Company Strategy and Development Direction - The company is focused on expanding profitability and margins, particularly in the SAO segment, which is expected to continue driving growth [17][20] - The Brownfield expansion project is underway, with construction activities on schedule and on budget, expected to accelerate in the second half of FY2026 [21][22] - The company is committed to a balanced capital allocation approach, focusing on growth investments and returning cash to shareholders through dividends and share repurchases [39] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the high end of the fiscal year 2026 operating income guidance of $660 million to $700 million, driven by increased volume, pricing actions, and productivity [36][37] - The aerospace market is expected to see significant demand growth, with management advising customers to place orders now to avoid being last in line [33][34] - The company anticipates continued favorable pricing trends due to supply-demand imbalances in nickel-based super alloys [28][29] Other Important Information - The effective tax rate for the quarter was 15.4%, lower than anticipated, with expectations for the full fiscal year 2026 to be between 21%-23% [16] - The company generated $39.2 million in cash from operating activities but had negative adjusted free cash flow of $3.4 million due to capital expenditures [21][23] - The company repurchased $49.1 million of shares during the quarter, with a cumulative total of $151 million under its $400 million stock buyback authorization [22][23] Q&A Session Summary Question: What has happened with jet engine alloy lead times? - Lead times remain extended, with expectations for further increases in orders following recent positive news from Boeing [48][50] Question: How did fastener demand trends track in the quarter? - Fastener sales were down 7% sequentially but up 40% year-over-year, with strong order intake expected for calendar year 2026 [54][55] Question: Can you speak to the duration of the new LTAs? - The five new LTAs range from two to five years, with expectations that contract lengths will remain consistent with current levels [62] Question: What is the outlook for defense demand? - The company is seeing strong demand across various defense segments, with a focus on increasing performance through innovative alloys [65] Question: Are customers receptive to increasing order intake? - Customers are very receptive to increasing order intake, with a notable sequential increase in aerospace bookings [71][72] Question: What is the expected timeline for the Brownfield expansion project? - Construction is expected to be complete by late fiscal 2027 or early fiscal 2028, with current activities focused on site preparation [90]

Financial Data and Key Metrics Changes - The company achieved record earnings with adjusted operating income of $153 million, a 31% increase year-over-year compared to $117.2 million in Q1 FY2025 [4][15] - Adjusted operating margin for the SAO segment reached 32%, up from 26.3% a year ago and 30.5% in the previous quarter [5][6] - Earnings per diluted share was $2.43 for the quarter, marking another record for profitability [16] Business Line Data and Key Metrics Changes - SAO segment net sales excluding surcharge were $533.9 million, up 5% year-over-year but down 3% sequentially [17] - PEP segment net sales excluding surcharge were $87.2 million, down 10% sequentially and down 6% year-over-year [19] - Aerospace and defense sales were up 1% sequentially and 11% year-over-year, with engine submarket sales up 14% sequentially [9][88] Market Data and Key Metrics Changes - Aerospace and defense bookings accelerated by 23% over the previous quarter, indicating strengthening market demand [7][30] - Medical market sales were down 20% sequentially and 16% year-over-year, primarily due to volatility in medical distribution [10] - Energy market sales were down 5% sequentially but up 8% year-over-year, driven by increasing demand for power generation [11] Company Strategy and Development Direction - The company is focused on expanding profitability and margins through productivity improvements and pricing actions, particularly in the aerospace and defense sectors [12][39] - The Brownfield expansion project is underway, with construction activities on schedule and on budget, expected to accelerate in the second half of FY2026 [21][22] - The company maintains a balanced capital allocation approach, focusing on growth investments and returning cash to shareholders through dividends and share repurchases [39] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the high end of the fiscal year 2026 operating income guidance of $660 million to $700 million, driven by increased volume and pricing actions [36][37] - The aerospace market is expected to see significant demand growth, with OEMs ramping up production rates, which will positively impact the company's order intake [30][34] - Management noted that the pricing environment for nickel-based super alloys remains favorable, with expectations for continued price increases due to supply-demand imbalances [26][28] Other Important Information - The company generated $39.2 million in cash from operating activities but had negative adjusted free cash flow of $3.4 million due to capital expenditures [21] - The liquidity position is strong, with $556.9 million available, including $208 million in cash [23] Q&A Session Summary Question: What has happened to jet engine alloy lead times? - Lead times remain extended, with expectations for further increases in orders following positive news from Boeing [48][50] Question: Can you elaborate on the duration of the new LTAs? - The new LTAs range from two to five years, with expectations that contract lengths will remain consistent with current levels [62] Question: How are fastener demand trends tracking? - Fastener sales were down 7% sequentially but up 40% year-over-year, with strong order intake expected for calendar year 2026 [55] Question: Is there line of sight to another quarter of sequential A&D growth? - Continued growth in order intake is anticipated, although specific percentages cannot be guaranteed [80] Question: What is the outlook for the Brownfield expansion project? - Construction is expected to be complete by late FY2027 or early FY2028, with current activities focused on site preparation [90]

Financial Data and Key Metrics Changes - The company reported record earnings with adjusted operating income of $153 million, a 31% increase year-over-year compared to $117.2 million in Q1 FY2025 [4][14] - Adjusted operating margin for the SAO segment reached 32%, up from 26.3% a year ago and 30.5% in the previous quarter [5][16] - Earnings per diluted share was $2.43 for the quarter, marking another record for profitability [15] Business Line Data and Key Metrics Changes - SAO segment net sales excluding surcharge were $533.9 million, up 5% year-over-year but down 3% sequentially [16] - PEP segment net sales excluding surcharge were $87.2 million, down 10% sequentially and down 6% year-over-year [18] - Aerospace and defense sales were up 1% sequentially and 11% year-over-year, with bookings accelerating by 23% over the previous quarter [9][12] Market Data and Key Metrics Changes - The aerospace supply chain is experiencing strengthening demand, particularly in the engine submarket, which saw a 14% sequential increase in sales [9][32] - Medical market sales were down 20% sequentially and 16% year-over-year, primarily due to volatility in medical distribution [10] - Energy market sales were down 5% sequentially but up 8% year-over-year, driven by increasing demand for power generation [11] Company Strategy and Development Direction - The company is focused on expanding profitability and margins through productivity improvements and pricing actions, particularly in the aerospace and defense sectors [5][12] - The Brownfield expansion project is underway, with construction activities on schedule and on budget, expected to accelerate in the second half of FY2026 [20][21] - The company aims to maintain a balanced capital allocation approach, investing in growth while returning cash to shareholders through dividends and share repurchases [22][38] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the high end of the earnings guidance for FY2026, projecting operating income of $660 million to $700 million, a 26% to 33% increase over FY2025 [35][36] - The aerospace market is expected to see significant demand growth, with management noting a positive outlook from customers regarding order intake [30][34] - The company anticipates continued pricing power due to a supply-demand imbalance in nickel-based super alloys [26][39] Other Important Information - The company generated $39.2 million in cash from operating activities but reported negative adjusted free cash flow of $3.4 million due to capital expenditures [20] - Liquidity as of the latest quarter was $556.9 million, with a net debt to EBITDA ratio well below one [23] Q&A Session Summary Question: What has happened with jet engine alloy lead times? - Lead times remain extended, with expectations for further increases in orders following positive news from Boeing [44] Question: Can you elaborate on the duration of the new LTAs? - The five new LTAs range from two to five years, with expectations that contract lengths will remain consistent with current levels [52] Question: How are fastener demand trends tracking? - Fastener sales were down 7% sequentially but up 40% year-over-year, with strong order intake expected for calendar year 2026 [48] Question: Is there line of sight to another quarter of sequential A&D growth? - Continued growth in order intake is expected over the next several quarters [63] Question: What is the outlook for the Brownfield expansion project? - Construction is expected to be complete by late FY2027 or early FY2028, with current activities focused on site preparation [70]

Financial Data and Key Metrics Changes - The company reported record earnings with adjusted operating income of $153 million, a 31% increase year-over-year compared to $117.2 million in the same quarter of 2025 [5][17] - Adjusted operating margin for the SAO segment reached 32%, up from 26.3% a year ago and 30.5% in the prior quarter, marking the fifteenth consecutive quarter of margin expansion [6][21] - Earnings per diluted share was $2.43 for the quarter, representing a record quarter for profitability [20] Business Line Data and Key Metrics Changes - SAO segment net sales excluding surcharge were $533.9 million, up 5% year-over-year but down 3% sequentially due to planned maintenance [20] - PEP segment net sales excluding surcharge were $87.2 million, down 10% sequentially and down 6% year-over-year, with operating income of $9.4 million [23][24] - Aerospace and defense sales were up 1% sequentially and 11% year-over-year, with bookings accelerating by 23% sequentially [11][12] Market Data and Key Metrics Changes - The aerospace supply chain is experiencing strengthening demand, particularly in the engine submarket, which saw a 14% sequential increase in sales [11][41] - Medical end-use market sales were down 20% sequentially and 16% year-over-year, primarily due to volatility in medical distribution [12][13] - Energy end-use market sales were down 5% sequentially but up 8% year-over-year, with order intake increasing by 41% in the quarter [14] Company Strategy and Development Direction - The company is focused on expanding profitability and margins through productivity improvements and pricing actions, particularly in the SAO segment [22][48] - The brownfield expansion project is underway, with construction activities on schedule and expected to accelerate in the second half of fiscal year 2026 [26][27] - The company aims to maintain a balanced capital allocation approach, investing in growth while returning cash to shareholders through stock buybacks and dividends [49] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the full-year earnings guidance, projecting operating income of $660 million to $700 million for fiscal year 2026, representing a 26% to 33% increase over the previous year [46] - The aerospace market is expected to see significant demand increases, driven by higher build rates from OEMs like Boeing and Airbus [48][49] - Management noted that the pricing environment for nickel-based superalloys remains favorable due to supply-demand imbalances [35][36] Other Important Information - The effective tax rate for the quarter was 15.4%, lower than anticipated, with expectations for the full fiscal year to be between 21% to 23% [19] - The company generated $39.2 million in cash from operating activities but reported negative adjusted free cash flow of $3.4 million due to capital expenditures [26][28] Q&A Session Summary Question: What has happened to jet engine alloy lead times? - Lead times remain extended, with expectations for them to push out again due to recent positive developments in the Boeing supply chain [57] Question: How are fastener demand trends tracking? - Fastener sales were down 7% sequentially but up 40% year-over-year, with strong order intake expected for calendar year 2026 [63] Question: Can you elaborate on the duration of the new LTAs? - The five new LTAs range from two to five years, with expectations that contract lengths will remain consistent with current levels [68] Question: What is the outlook for defense demand? - The company is seeing strong demand across various defense segments, with a focus on increasing performance through innovative alloys [74] Question: Is there an expectation for continued growth in aerospace bookings? - Management anticipates continued growth in aerospace bookings, with a strong upward trend expected over the next several quarters [90]

Core Insights - Carpenter Technology reported a significant increase in fiscal 2026 Q1 earnings, with profit growing 40% to $2.43 per share and sales reaching $733.7 million, up 2% year-over-year [1]. Financial Performance - Fiscal 2026 Q1 profit increased by 40% to $2.43 per share [1] - Sales totaled $733.7 million, reflecting a 2% increase compared to the previous year [1] Market Position - Carpenter Technology's stock experienced a notable rise following the earnings report, indicating strong market performance [1]. - The company has achieved a Relative Strength Rating upgrade, suggesting improving technical performance [2]. Industry Recognition - Carpenter Technology's Composite Rating has climbed to 96, indicating a strong position within the industry [4].

Core Insights - Carpenter Technology (CRS) reported quarterly earnings of $2.43 per share, exceeding the Zacks Consensus Estimate of $2.13 per share, and up from $1.73 per share a year ago [1] - The company achieved an earnings surprise of +14.08% and has surpassed consensus EPS estimates in all four quarters over the past year [2] - Revenues for the quarter ended September 2025 were $733.7 million, slightly above the Zacks Consensus Estimate by 0.63%, and an increase from $717.6 million year-over-year [3] Earnings Performance - The earnings surprise of +14.08% indicates strong performance relative to expectations [2] - The company has consistently outperformed EPS estimates, with a previous quarter's earnings of $2.21 against an expectation of $2.03, resulting in a surprise of +8.87% [2] Revenue Analysis - Carpenter's revenue growth reflects a year-over-year increase, with the latest quarter's revenue surpassing the previous year's figures [3] - The company has only topped consensus revenue estimates once in the last four quarters, indicating variability in revenue performance [3] Stock Performance - Carpenter shares have increased by approximately 44.2% since the beginning of the year, significantly outperforming the S&P 500's gain of 13.9% [4] - The future price movement of the stock will depend on management's commentary during the earnings call and the sustainability of earnings expectations [4] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $2.15, with expected revenues of $734.66 million, and for the current fiscal year, the EPS estimate is $9.52 on revenues of $3.11 billion [8] - The estimate revisions trend for Carpenter was mixed prior to the earnings release, resulting in a Zacks Rank 3 (Hold), suggesting the stock is expected to perform in line with the market [7] Industry Context - The Steel - Specialty industry, to which Carpenter belongs, is currently ranked in the bottom 30% of over 250 Zacks industries, which may impact stock performance [9] - The performance of Carpenter's stock may also be influenced by the overall outlook for the industry [9]

October 23, 2025 CARPENTER TECHNOLOGY CORPORATION 1 st Quarter Fiscal Year 2026 Earnings Call © 2025 CRS Holdings, LLC. All rights reserved. Cautionary Statement Forward-looking statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Act of 1995. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ from those projected, anticipated or implied. The most significant of these uncertaint ...

Core Insights - Carpenter Technology Corporation reported record operating income of $153.3 million for the first quarter of fiscal year 2026, marking a 31% increase year-over-year and surpassing the previous record set in the fourth quarter of fiscal year 2025 [4][5][8] - The Specialty Alloys Operations (SAO) segment achieved an adjusted operating margin of 32.0%, up from 26.3% in the same quarter last year, representing the fifteenth consecutive quarterly margin increase [4][5][34] - Demand in the Aerospace and Defense end-use market accelerated, with bookings increasing 23% sequentially, reflecting a strengthening supply chain and higher build rates [4][5][43] Financial Performance - Net sales for Q1 FY2026 were $733.7 million, a 2% increase from $717.6 million in Q1 FY2025, while net sales excluding surcharge were $603.1 million, up 4% year-over-year [7][43] - Operating income for the quarter was $153.3 million, compared to $113.6 million in the prior year, with earnings per diluted share rising to $2.43 from $1.67 [8][18] - The SAO segment generated $170.7 million in operating income, a 27% increase year-over-year, while the Performance Engineered Products segment reported operating income of $9.4 million [5][24] Cash Flow and Capital Allocation - Cash generated from operating activities was $39.2 million, slightly down from $40.2 million in the same quarter last year, while adjusted free cash flow was negative $3.4 million due to increased capital expenditures related to a brownfield expansion project [9][40] - The company executed $49.1 million in share repurchases during the quarter, with a remaining authorization of $249.0 million under its $400.0 million repurchase program [10][41] Outlook - For the second quarter of fiscal year 2026, the company anticipates operating income between $152 million and $156 million, with a full-year outlook of $660 million to $700 million, representing a 26% to 33% increase over fiscal year 2025 [5][6] - The company is committed to achieving an operating income target of $765 million to $800 million for fiscal year 2027, supported by ongoing market dynamics and capacity expansions [6][10]