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]

Core Insights - Carpenter Technology Corporation (CRS) is set to report its first-quarter fiscal 2026 results on October 23, with sales estimated at $729 million, reflecting a 1.6% increase year-over-year [1][4] - The earnings consensus estimate for CRS is $2.13 per share, indicating a year-over-year growth of 23.1%, with a 1.4% upward revision in the past 60 days [1][4] Earnings Performance - CRS has a history of exceeding Zacks Consensus Estimates, achieving an average surprise of 8.4% over the last four quarters [3][4] - The reported earnings for the last four quarters were $2.21, $1.88, $1.66, and $1.73, with respective surprises of 8.87%, 8.05%, 6.41%, and 10.19% [4] Market Dynamics - The growth in aerospace, defense, and medical applications is expected to positively influence CRS's performance in fiscal 2026 [7] - Increased demand in aerospace submarkets is anticipated as supply chains adapt to rising travel needs [7] Challenges and Mitigating Factors - CRS faces challenges from labor and chip shortages, which may impact performance [8] - However, gains from productivity improvements, higher prices, and an enhanced product mix are expected to offset these challenges [8] Segment Performance Expectations - Specialty Alloys Operations segment sales are projected at $688 million, a 6.6% increase from the previous year, with an operating profit expected to rise to $165 million from $134.5 million [9] - Performance Engineered Products segment net sales are anticipated to grow by 3.3% year-over-year to $104 million, with an operating profit expected to increase to $11.2 million from $7.3 million [10] Stock Performance - CRS shares have appreciated by 55.6% over the past year, significantly outperforming the industry average growth of 25.5% [11]

Core Insights - N-able, Inc. successfully helped CRS Technology Consultants prevent a significant ransomware attack on a regional CPA firm, achieving resolution in under 24 hours without any ransom payment or data loss [1][2][3] Company Overview - N-able, Inc. is a global software company focused on delivering an end-to-end cyber resiliency platform, which includes capabilities for endpoint management, security operations, and data protection [1][6] - The company emphasizes a partner-first approach, combining its products with expert training and peer-led events to empower customers [6] Incident Details - The CPA firm faced a ransomware attack exploiting a known SonicWall vulnerability just days before critical federal tax deadlines [2] - CRS Technology Consultants utilized N-able's cyber resiliency platform to contain and remediate the attack swiftly, allowing the firm to resume operations by lunchtime on the same day [3][4] Response and Recovery - The N-able UEM solution provided real-time alerts as servers began to fail, enabling immediate action to contain the threat [5] - Behavioral AI in N-able's Endpoint Detection and Response solution detected suspicious activity, isolating compromised endpoints to prevent further spread of the attack [5] - Offsite backups via N-able's Cove Data Protection ensured that even destroyed local backups could be restored, maintaining business continuity [5] Strategic Implications - The incident showcased the importance of business resilience, demonstrating that with the right tools and preparation, organizations can recover from ransomware attacks effectively [4] - CRS Technology Consultants has since made N-able's Adlumin MDR a standard service for its clients, enhancing their overall security posture [3]

Core Viewpoint - Carpenter Technology (CRS) shows potential for significant upside based on Wall Street analysts' short-term price targets, with a mean target of $322.5 indicating a 33.2% upside from the current price of $242.17 [1] Price Targets and Estimates - The average price target for CRS ranges from a low of $305.00 to a high of $375.00, with a standard deviation of $35, suggesting a variability in estimates [2] - The lowest estimate indicates a potential increase of 25.9%, while the highest suggests a 54.9% upside [2] - Analysts' agreement is reflected in the standard deviation; a smaller standard deviation indicates greater consensus among analysts [2][9] Analyst Sentiment and Earnings Estimates - Analysts have shown strong agreement in revising earnings estimates upward, which is a positive indicator for potential stock price increases [4][11] - Over the last 30 days, two earnings estimates for CRS have been revised higher, leading to a 0.1% increase in the Zacks Consensus Estimate [12] - CRS holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate factors [13] Caution on Price Targets - While price targets are a common metric, relying solely on them for investment decisions may not be prudent due to historical inaccuracies [3][7][10] - Analysts may set overly optimistic price targets influenced by business relationships, which can lead to inflated expectations [8]

Core Viewpoint - Carpenter Technology Inc. has shown significant stock performance with a 58.13% increase over the past year, leading to optimism among long-term shareholders, while concerns about potential overvaluation arise from the price-to-earnings (P/E) ratio analysis [1]. Group 1: Stock Performance - The current stock price of Carpenter Technology is $254.06, reflecting a 0.81% increase in the current session [1]. - Over the past month, the stock has increased by 4.83% [1]. - The stock has experienced a substantial increase of 58.13% over the past year [1]. Group 2: P/E Ratio Analysis - The P/E ratio is a critical metric for long-term shareholders to evaluate the company's market performance against historical earnings and industry standards [5]. - Carpenter Technology has a lower P/E ratio compared to the Aerospace & Defense industry average of 148.64, which may suggest the stock is undervalued or that shareholders do not expect future performance to improve [6]. - A lower P/E ratio can indicate undervaluation but may also reflect a lack of expected growth from shareholders [9]. Group 3: Investment Considerations - The P/E ratio should not be used in isolation; it is essential to consider other financial metrics and qualitative factors to make informed investment decisions [9].