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].

Core Insights - Carpenter Technology reported $728 million in revenue for the quarter ended December 2025, marking a year-over-year increase of 7.6% and an EPS of $2.33 compared to $1.66 a year ago, with an EPS surprise of +5.79% [1] Financial Performance - Revenue of $728 million was slightly below the Zacks Consensus Estimate of $728.57 million, resulting in a surprise of -0.08% [1] - The consensus EPS estimate was $2.20, leading to an EPS surprise of +5.79% [1] Key Metrics - Carpenter's shares returned +5.3% over the past month, outperforming the Zacks S&P 500 composite's +0.8% change, and the stock holds a Zacks Rank 2 (Buy) [3] - Volumes Sold in Pounds for Specialty Alloys Operations were 46.84 million, exceeding the average estimate of 44.86 million [4] - Total Volumes Sold in Pounds reached 48.4 million, surpassing the average estimate of 46.45 million [4] - Net Sales from the End-Use Market Excluding Surcharge Revenue totaled $589.1 million, slightly below the average estimate of $598.21 million, but reflecting a year-over-year change of +7.5% [4] - Surcharge revenue was reported at $138.9 million, exceeding the estimated $133.03 million, with a year-over-year increase of +7.8% [4] - Net Sales for Performance Engineered Products were $83.2 million, below the average estimate of $97.43 million, indicating a year-over-year decline of -12.4% [4] - Operating Income for Specialty Alloys Operations was $174.6 million, slightly above the average estimate of $170.94 million [4]

Financial Data and Key Metrics Changes - The company reported record operating income of $155 million for the second quarter, a 31% increase compared to the same quarter of fiscal year 2025 [4][15] - Adjusted operating margin for the SAO segment reached 33.1%, up from 28.3% a year ago and 32% in the prior quarter [6][17] - Adjusted earnings per diluted share was $2.33 for the quarter, excluding the impact of debt refinancing [15][16] Business Line Data and Key Metrics Changes - SAO segment net sales excluding surcharge were $527.3 million, up 10% year-over-year, while PEP segment net sales were $77.2 million, down 11% sequentially and down 10% year-over-year [16][18] - SAO reported operating income of $174.6 million, a 29% increase year-over-year, while PEP reported operating income of $6.9 million [7][18] Market Data and Key Metrics Changes - Sales in the aerospace and defense end-use market were down 1% sequentially but up 15% year-over-year, with aerospace engine materials order intake up 30% sequentially [9][10] - Medical end-use market sales were down 7% sequentially and 22% year-over-year, primarily due to specific titanium product demand [11] - Energy end-use market sales were down 10% sequentially but up 19% year-over-year, driven by power generation demand [12] Company Strategy and Development Direction - The company is focused on capital allocation towards growth projects and returning cash to shareholders through share repurchases and dividends [20][21] - A brownfield capacity expansion project is underway, aimed at increasing production capacity for nickel-based superalloys [30][36] - The company anticipates continued strong demand in aerospace and defense markets, with a focus on securing long-term agreements with customers [32][34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing strength of the aerospace demand environment, citing significant increases in order intake and production rates [23][25] - The company raised its fiscal year 2026 operating income guidance to $680 million-$700 million, reflecting a 30%-33% increase over the previous fiscal year [34][37] - Management noted that pricing actions will continue to be a positive tailwind due to supply-demand imbalances in the nickel-based superalloy market [33] Other Important Information - 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 [20][22] - Total liquidity was reported at $730.8 million, including $231.9 million in cash [22] Q&A Session Summary Question: How broad-based is the participation of airframe customers in ordering? - Management noted increased activity across all aerospace sub-markets, with significant sequential increases in engine orders and structural customer orders coming off the sidelines [41][42] Question: What visibility is there regarding the defense sub-market orders? - Management indicated that there is pent-up demand from the defense sub-market due to previous government shutdowns, and orders are expected to come back rapidly [43][44] Question: Is pricing still trending higher? - Management confirmed that pricing remains strong, with no discounts on premium aerospace products, and expects continued upward pricing trends [45][48] Question: How did engine and fastener sales trend during the quarter? - Sales were relatively flat quarter-over-quarter, but year-over-year sales showed substantial increases across all aerospace sub-markets [83][84] Question: What is the outlook for the additive business? - Management sees potential for growth in the additive business, with improved adoption rates and increased activity from large customers [86][88]

Financial Data and Key Metrics Changes - The company reported record operating income of $155 million for the second quarter, a 31% increase compared to the same quarter of fiscal year 2025 [4][15] - Adjusted operating margin reached 33.1%, up from 28.3% year-over-year and 32% sequentially [6][17] - Total sales, excluding raw material surcharge, increased by 8% year-over-year but decreased by 2% sequentially [9][14] Business Line Data and Key Metrics Changes - The SAO segment generated $527.3 million in net sales, a 10% increase year-over-year, while the PEP segment saw net sales of $77.2 million, down 10% year-over-year [16][18] - SAO reported operating income of $174.6 million, a 29% year-over-year increase, while PEP's operating income was $6.9 million, down from $9.4 million in the previous quarter [7][18] Market Data and Key Metrics Changes - Sales in the aerospace and defense in-use market were up 15% year-over-year, with commercial aerospace bookings increasing by 23% sequentially [10][11] - The medical in-use market saw a 22% year-over-year decline, primarily due to specific titanium product demand issues [11] - Energy in-use market sales were up 19% year-over-year, driven by power generation demand [12] Company Strategy and Development Direction - The company is focused on expanding its capacity for nickel-based superalloys, with a brownfield capacity expansion project underway [30][36] - Long-term agreements with aerospace customers have been established, reflecting a commitment to securing supply and pricing stability [32][71] - The company aims to balance capital allocation between growth investments and shareholder returns, including share repurchases and dividends [21][36] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the aerospace demand environment, citing significant increases in order intake and production rates from major customers like Boeing [23][24] - The company raised its fiscal year 2026 operating income guidance to $680 million-$700 million, reflecting a 30%-33% increase over the previous fiscal year [34] - Management noted that pricing actions will continue to be a positive tailwind due to supply-demand imbalances in the nickel-based superalloy market [33][48] Other Important Information - The company generated $132.2 million in cash from operating activities and expects to generate at least $280 million of adjusted free cash flow for fiscal year 2026 [20][21] - The effective tax rate for the quarter was 19%, lower than anticipated due to discrete tax benefits [15] Q&A Session Summary Question: How broad-based is the participation of airframe customers in ordering? - Management noted increased activity across all aerospace sub-markets, with significant sequential increases in engine orders and structural customer orders coming off the sidelines [41][42] Question: What visibility is there regarding the defense sub-market orders? - Management indicated that there is pent-up demand from the defense sub-market due to previous government shutdowns, and orders are expected to pick up rapidly [43][44] Question: Is pricing still trending higher? - Management confirmed that pricing remains strong, with no discounts on premium aerospace products, and expects continued upward pricing trends [45][48] Question: How did engine and fastener sales trend during the quarter? - Sales were relatively flat quarter-over-quarter, but year-over-year growth was substantial across all aerospace sub-markets [83][84] Question: What is the outlook for the additive business? - Management sees potential for growth in the additive business, driven by higher adoption rates and increased activity with large customers [86][88]

Financial Data and Key Metrics Changes - The company reported record operating income of $155 million for Q2 FY2026, a 31% increase compared to Q2 FY2025, and slightly up from the previous quarter [5][15] - Adjusted operating margin for the SAO segment reached 33.1%, up from 28.3% a year ago and 32% in the prior quarter [6][18] - Adjusted earnings per diluted share was $2.33 for the quarter, excluding the impact of debt refinancing [16][17] Business Line Data and Key Metrics Changes - SAO segment net sales excluding surcharge were $527.3 million, up 10% year-over-year and down 1% sequentially [17][18] - PEP segment net sales excluding surcharge were $77.2 million, down 11% sequentially and down 10% year-over-year, primarily due to lower demand for titanium products [19][20] Market Data and Key Metrics Changes - Sales in the aerospace and defense in-use market were down 1% sequentially but up 15% year-over-year, with aerospace engine materials order intake up 30% sequentially [10][11] - Medical in-use market sales were down 7% sequentially and 22% year-over-year, but orthopedic and dental sub-markets remained strong [12] - Energy in-use market sales were down 10% sequentially but up 19% year-over-year, driven by power generation demand [13] Company Strategy and Development Direction - The company is focused on expanding its capacity for nickel-based superalloys, with a brownfield capacity expansion project underway [30][36] - The company aims to maintain a balanced capital allocation approach, investing in growth projects while returning cash to shareholders through dividends and share repurchases [22][37] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing strength of the aerospace demand environment, citing significant increases in order intake and build rates [24][26] - The company raised its operating income guidance for FY2026 to $680 million-$700 million, reflecting a 30%-33% increase over FY2025 [34] Other Important Information - 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 FY2026 [21][22] - The company completed a refinancing of its long-term debt, extending maturity to 2034 and reducing interest rates [23] Q&A Session Summary Question: How broad-based is the participation of airframe customers in ordering? - Management noted increased activity across all aerospace sub-markets, with significant orders from structural customers returning after previous hesitations due to Boeing's issues [39][40] Question: What visibility is there regarding the defense sub-market orders? - Management indicated that there is pent-up demand from the defense sub-market due to the government shutdown, and orders are expected to pick up rapidly [40] Question: Is pricing still trending higher? - Management confirmed that pricing remains strong, with no discounts on premium aerospace products, and expects continued upward pricing trends due to supply-demand imbalances [42][43] Question: How did engine and fastener sales trend during the quarter? - Sales were relatively flat quarter-over-quarter, but year-over-year sales showed substantial increases across all aerospace sub-markets [51] Question: What is the outlook for the additive business? - Management sees potential for growth in the additive business, with increased adoption and activity from large customers [53]

Core Viewpoint - Carpenter Technology (CRS) reported quarterly earnings of $2.33 per share, exceeding the Zacks Consensus Estimate of $2.20 per share, and showing a significant increase from $1.66 per share a year ago, representing an earnings surprise of +5.79% [1] Financial Performance - The company achieved revenues of $728 million for the quarter ended December 2025, slightly missing the Zacks Consensus Estimate by 0.08%, compared to $676.9 million in the same quarter last year [2] - Over the last four quarters, Carpenter has surpassed consensus EPS estimates four times but has only topped consensus revenue estimates once [2] Stock Performance - Carpenter shares have increased approximately 5.3% since the beginning of the year, outperforming the S&P 500, which gained 1.9% [3] - The sustainability of the stock's price movement will depend on management's commentary during the earnings call and future earnings expectations [3] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $2.52 on revenues of $787.1 million, and for the current fiscal year, it is $10.07 on revenues of $3.07 billion [7] - The estimate revisions trend for Carpenter was favorable ahead of the earnings release, resulting in a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [6] Industry Context - The Steel - Specialty industry, to which Carpenter belongs, is currently ranked in the bottom 28% of over 250 Zacks industries, suggesting potential challenges ahead [8] - Another company in the same industry, Metallus (MTUS), is expected to report quarterly earnings of $0.05 per share, reflecting a year-over-year change of +162.5% [9]

January 29, 2026 CARPENTER TECHNOLOGY CORPORATION 2 nd 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 ...

Delivered Record Quarterly Operating IncomeExpanded Operating Margins in Specialty Alloys Operations SegmentExceeded Second Quarter Operating Income Guidance for Specialty Alloys Operations SegmentDemand Accelerating in Aerospace and Defense End-Use Market with Higher Sequential BookingsCompleted Negotiations for Several Aerospace Long-Term Agreements with Significant Value Realization Increased Operating Income Guidance for Fiscal Year 2026 PHILADELPHIA, Jan. 29, 2026 (GLOBE NEWSWIRE) -- Carpenter Technolo ...

Core Viewpoint - Carpenter Technology Corporation (CRS) is positioned for growth driven by demand in the aerospace and defense sectors, with significant earnings expectations for the upcoming quarterly report [1][2][3]. Financial Performance Expectations - Analysts project CRS's earnings per share (EPS) to be $2.20, reflecting a 32.5% increase from the previous year [2][6]. - Revenue is expected to reach $728.57 million, marking a 7.6% rise from the same quarter last year [2][6]. - The consensus estimate for EPS has been revised upward by 0.7% over the past 30 days, indicating positive sentiment [2]. Growth Projections - CRS is projected to achieve an annual sales growth of 7% and an annual EBITDA growth of nearly 20% from 2025 to 2028 [3][6]. - The company's margins are expected to rise significantly from 23.1% to 32% during this period, supporting its premium valuation [3]. Market Valuation Metrics - CRS maintains a price-to-earnings (P/E) ratio of approximately 42.26, indicating a high market valuation of its earnings [5]. - The price-to-sales ratio stands at about 6.01, and the enterprise value to sales ratio is around 6.18 [5]. - CRS demonstrates strong liquidity with a current ratio of around 4.44 and a moderate debt-to-equity ratio of approximately 0.37 [5].

Core Viewpoint - Analysts project Carpenter Technology (CRS) will report quarterly earnings of $2.20 per share, a 32.5% increase year over year, with revenues expected to reach $728.57 million, reflecting a 7.6% increase from the same quarter last year [1]. Earnings Projections - The consensus EPS estimate has been revised 0.7% higher in the last 30 days, indicating a collective reevaluation by analysts [2]. - Changes in earnings projections are crucial for predicting investor reactions, with empirical studies showing a strong link between earnings estimate trends and short-term stock price movements [3]. Key Metrics Estimates - Analysts expect 'Net Sales- End-Use Market Excluding Surcharge Revenue- Total' to be $598.21 million, indicating a year-over-year change of +9.2% [4]. - The estimated 'Net Sales- End-Use Market Excluding Surcharge Revenue- Surcharge revenue' is $133.03 million, reflecting a +3.2% change year over year [5]. - 'Net Sales- Performance Engineered Products' is projected to reach $97.43 million, showing a +2.6% change from the previous year [5]. - 'Net Sales- Specialty Alloys Operations' is forecasted at $666.33 million, suggesting a +10.8% year-over-year change [6]. Volume and Income Estimates - 'Volumes Sold in Pounds - Specialty Alloys Operations' is expected to be 44.86 million, compared to 44.71 million in the same quarter last year [6]. - The consensus for 'Volumes Sold in Pounds' is 46.45 million, up from 46.17 million year-over-year [7]. - 'Operating Income- Performance Engineered Products' is projected at $9.57 million, an increase from $7.00 million reported in the same quarter last year [7]. - 'Operating Income- Specialty Alloys Operations' is estimated at $170.94 million, compared to $135.60 million in the same quarter last year [8]. Stock Performance - Carpenter shares have increased by +7.1% in the past month, outperforming the Zacks S&P 500 composite's +0.4% [8]. - With a Zacks Rank 2 (Buy), CRS is expected to outperform the overall market in the near term [8].