Core Insights - Carpenter Technology Corporation (CRS) reported earnings of $1.88 per share for Q3 fiscal 2025, exceeding the Zacks Consensus Estimate of $1.74, representing a 58% increase from $1.19 per share in the same quarter last year, driven by improvements in product mix and operating efficiencies [1][2] Financial Performance - Net revenues increased by 6.1% year over year to $727 million, although this fell short of the Zacks Consensus Estimate of $732 million, with shipment volumes down 7% year over year [2] - Revenue growth by end-markets included an 18.4% increase in Aerospace and Defense and a 25.9% increase in Energy, while Transportation revenues decreased by 16.7%, Distribution by 5.2%, Industrial and Consumer by 6.1%, and Medical by 14% [2] - Gross profit rose by 36.6% year over year to $201 million, with a gross margin of 27.6%, up from 21.5% in the prior year [3] - Adjusted operating income reached a record $138 million, a 53.1% increase from $90 million in the prior year [3] Segment Performance - Specialty Alloys Operations segment reported revenues of $643 million, up from $608.5 million year over year, but below the expected $661 million, with sales volume at 44,584 pounds compared to 50,846 pounds in the previous year [4] - The segment's operating profit increased to $151 million from $103.5 million year over year, exceeding the projected $142 million [5] - Performance Engineered Products segment saw a slight revenue decline of 0.7% year over year to $95 million, missing the estimate of $102 million, with sales volume slightly higher than projected [5][6] Cash Flow and Balance Sheet - Cash and cash equivalents at the end of Q3 fiscal 2025 were $151.5 million, down from $199 million at the end of fiscal 2024, while long-term debt remained stable at approximately $695 million [7] - Cash flow from operating activities was $74.2 million, down from $83.4 million in the prior year [7] Guidance - The company raised its fiscal 2025 operating income guidance to $520-$527 million from the previous range of $500-$520 million, with Q4 operating income expected to be between $146-$153 million [8] Stock Performance - CRS shares have increased by 145.1% over the past year, significantly outperforming the industry growth of 29.6% [10]

Financial Data and Key Metrics Changes - The company reported a record operating income of $138 million for Q3 FY2025, a 53% increase year-over-year and 10% higher than the previous record in Q4 FY2024 [10][12][54] - Adjusted operating margins in the SAO segment reached 29.1%, up from 21.4% a year ago and 28.3% in the prior quarter [11][54] - Adjusted free cash flow for the quarter was $34 million, contributing to a total of $250 million to $300 million expected for FY2025 [12][50][54] Business Line Data and Key Metrics Changes - The SAO segment generated operating income of $151.4 million, a 46% increase year-over-year, with net sales excluding surcharge up 8% [11][38] - The PEP segment reported net sales of $96.8 million, up 2% year-over-year and 12% sequentially, with operating income improving to $10.9 million [41][42] Market Data and Key Metrics Changes - Sales in the aerospace and defense market increased 12% sequentially, driven by a 16% increase in engine sales [15][16] - The energy end-use market saw a 26% year-over-year increase in sales, indicating strong demand from power generation customers [20] Company Strategy and Development Direction - The company is focused on maintaining a strong market position through a broad solutions portfolio and manufacturing execution excellence [10][32] - Long-term supply agreements (LTAs) are being pursued to secure future sales, with two recently concluded agreements expected to benefit both the company and its customers [17][84] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate current challenges, citing a strong order intake and improved market conditions [66][74] - The company raised its full-year operating income guidance to a range of $520 million to $527 million, reflecting nearly a 50% increase over FY2024 [13][54] Other Important Information - The company is actively managing its working capital and has a healthy liquidity position, ending the quarter with total liquidity of $500.4 million [50] - The brownfield expansion project is expected to enhance capacity and is projected to yield an attractive return on capital of over 20% [61] Q&A Session Summary Question: Can you characterize the order trends in the quarter? - Orders were up over 20% sequentially, with ongoing requests for earlier deliveries from customers [66] Question: What is the current pricing environment? - Pricing actions are improving due to a tightening supply-demand imbalance, with recent LTAs expected to contribute positively in the future [70][72] Question: What are the lead times for aerospace engines? - Lead times remain at up to 60 weeks for aerospace engines, with no expected changes [80] Question: Is there any impact from the SPS fire? - There was no material impact on the company's business from the SPS fire [86] Question: What is the outlook for the medical business? - Medical sales are projected to increase in Q4 compared to Q3, following a period of destocking [106] Question: How is the company managing inventory? - The company expects inventory to decrease in Q4, focusing on reducing work-in-progress (WIP) [142][144] Question: What is the status of the brownfield investment? - The investment will face some tariffs, but it is a small part of the overall spend, and the project is expected to enhance capacity significantly [151]

Financial Performance - Net sales for the three months ended March 31, 2025, increased to $727.0 million, up 6.3% from $684.9 million in the same period of 2024[11] - Gross profit for the nine months ended March 31, 2025, rose to $554.6 million, a 40.9% increase compared to $393.7 million in 2024[11] - Net income for the three months ended March 31, 2025, was $95.4 million, significantly higher than $6.3 million in the same period of 2024, representing a 1415.9% increase[11] - Earnings per share (EPS) for the three months ended March 31, 2025, were $1.90, compared to $0.12 in 2024, reflecting a substantial increase[11] - Net income for the nine months ended March 31, 2025, was reported at $264.3 million, a significant increase compared to $6.3 million for the same period in 2024[20] - The company reported a total comprehensive income of $102.1 million for the three months ended March 31, 2025, compared to $33.4 million in the same period of 2024[14] - The company’s operating income for the nine months ended March 31, 2025, was $370.4 million, up from $214.8 million in the same period of 2024, marking a 72.5% increase[11] - Basic earnings per common share for the three months ended March 31, 2025, was $1.90, compared to $0.12 for the same period in 2024, reflecting a growth of 1583%[46] - Basic earnings per common share increased to $5.27 for the nine months ended March 31, 2025, compared to $1.87 for the same period in 2024, reflecting a growth of 181.8%[46] Assets and Equity - Total assets as of March 31, 2025, amounted to $3,361.8 million, an increase from $3,291.7 million as of June 30, 2024[9] - Total stockholders' equity increased to $1,781.7 million as of March 31, 2025, compared to $1,628.8 million as of June 30, 2024[9] - As of March 31, 2025, total equity increased to $1,781.7 million from $1,716.9 million at December 31, 2024, reflecting a growth of approximately 3.8%[18] - Specialty Alloys Operations reported total assets of $2,671.7 million as of March 31, 2025, compared to $2,542.2 million in the previous year, showing a growth of 5.1%[102] - Consolidated total assets for Performance Engineered Products were $427.2 million as of March 31, 2025, a slight decrease from $431.5 million in the previous year[102] - Corporate total assets decreased to $265.5 million as of March 31, 2025, down from $334.8 million in the previous year, a decline of 20.7%[102] Cash Flow and Operating Activities - Net cash provided from operating activities for the nine months ended March 31, 2025, was $182.3 million, up from $105.4 million in 2024[16] - The company reported a decrease in cash and cash equivalents to $151.5 million as of March 31, 2025, down from $199.1 million at the beginning of the year[16] - Total cash and cash equivalents at the end of the period were $151.5 million, up from $53.5 million at the end of March 2024[16] - The company made cash contributions of $58.5 million to its pension plans during the nine months ended March 31, 2025, compared to $4.9 million in the same period of 2024[51] Capital Expenditures - The company plans to continue investing in property, plant, and equipment, with purchases amounting to $96.3 million for the nine months ended March 31, 2025[16] - Capital expenditures for the three months ended March 31, 2025, were $40.2 million, compared to $21.6 million in the same period of 2024, indicating a significant increase of 86.0%[102] - Consolidated capital expenditures for the nine months ended March 31, 2025, totaled $96.3 million, up from $68.9 million in the same period of 2024, indicating a 39.8% increase[102] - Capital expenditures for Specialty Alloys Operations in Q1 2025 were $36.2 million, significantly up from $17.6 million in Q1 2024, marking a 105.7% increase[102] - Performance Engineered Products capital expenditures decreased slightly to $2.8 million in Q1 2025 from $3.2 million in Q1 2024, a decline of 12.5%[102] - Corporate capital expenditures for Q1 2025 were $1.2 million, up from $0.8 million in Q1 2024, representing a 50% increase[102] Revenue Segments - Revenue from the Aerospace and Defense sector for the three months ended March 31, 2025, was $454.7 million, up from $391.1 million in the same period of 2024, marking a growth of 16.2%[40] - Revenue from the Medical sector for the three months ended March 31, 2025, was $85.0 million, a decrease from $99.6 million in the same period of 2024, reflecting a decline of 14.7%[40] - The Energy segment generated $46.4 million in revenue for the three months ended March 31, 2025, compared to $38.7 million in the same period of 2024, representing an increase of about 20.0%[40] - Aerospace and Defense segment sales reached $1,239.6 million, while Medical segment sales were $258.1 million for the nine months ended March 31, 2025[42] - The United States accounted for $1,273.9 million in total net sales, representing a decrease of 6.0% from $1,150.7 million in the prior year[42] Liabilities and Debt - Long-term debt as of March 31, 2025, was $695.1 million, slightly up from $694.2 million as of June 30, 2024[58] - The company had $348.9 million available under its Credit Facility as of March 31, 2025, with no short-term borrowings[54] - The borrowing rate for the Credit Facility was 6.17% as of March 31, 2025[56] - The company expects to make $6.0 million of required cash pension contributions during the remainder of fiscal year 2025[51] - Environmental remediation liabilities recorded were $17.5 million as of March 31, 2025, slightly up from $17.3 million as of June 30, 2024[61] - The Company authorized a share repurchase program of up to $400.0 million for its outstanding common stock, with $322.2 million remaining available for future purchases as of March 31, 2025[64] Tax and Other Expenses - The effective tax rate for the three months ended March 31, 2025, was 21.8%, a decrease from 37.6% in the same period of 2024[89] - Income tax expense for the three months ended March 31, 2025, was $26.6 million, compared to $3.8 million for the same period in 2024[89] - The company reported a total other expense, net of $3.8 million for the three months ended March 31, 2025, down from $52.9 million in the same period of 2024[86] Derivative Instruments and Risk Management - The company recorded a net gain on derivative instruments of $3.1 million, contributing positively to comprehensive income[20] - The fair value of the Company's derivative financial instruments was $2.1 million as of March 31, 2025, with $2.1 million in liabilities[67] - The Company has been designated as a potentially responsible party for certain Superfund sites, but future remediation costs are not expected to materially affect financial position[62] - The Company’s derivative contracts are subject to master netting arrangements, allowing for net settlement, with total asset and liability derivatives both at $2.1 million as of March 31, 2025[77] Miscellaneous - The company plans to adopt new accounting standards related to segment reporting and income tax disclosures, effective for fiscal years beginning after December 15, 2023, and December 15, 2024, respectively[28][29] - The Company has elected to omit disclosure for remaining performance obligations expected to be satisfied in one year or less, streamlining reporting requirements[39] - The company does not anticipate material effects on its financial position from ongoing legal claims and actions[63]

Carpenter Technology Corporation (NYSE:CRS) Q3 2025 Earnings Conference Call April 24, 2025 10:00 AM ET Company Participants John Huyette - Vice President, Investor Relations Tony Thene - President & Chief Executive Officer Tim Lain - Senior Vice President & Chief Financial Officer Conference Call Participants Scott Deuschle - Deutsche Bank Josh Sullivan - The Benchmark Company Bennett Moore - JPMorgan Andre Madrid - BTIG Spencer Breitzke - TD Cowen Philip Gibbs - KeyBanc Capital Markets Scott Deuschle - De ...

Core Insights - Carpenter Technology (CRS) reported revenue of $727 million for the quarter ended March 2025, marking a year-over-year increase of 6.2% and an EPS of $1.88 compared to $1.19 a year ago, although the revenue fell short of the Zacks Consensus Estimate of $731.52 million by 0.62% [1] - The company achieved an EPS surprise of +8.05%, with the consensus EPS estimate being $1.74 [1] Financial Performance Metrics - Carpenter's stock has returned +0.9% over the past month, contrasting with the Zacks S&P 500 composite's -5.1% change, and currently holds a Zacks Rank 3 (Hold) [3] - Volumes Sold in Pounds for Specialty Alloys Operations were 44.58 million, below the average estimate of 47.62 million [4] - Total Volumes Sold in Pounds were 46.5 million, compared to the average estimate of 49.04 million [4] - Net Sales in the End-Use Market Excluding Surcharge Revenue totaled $597 million, slightly above the estimated $594.40 million, representing a year-over-year increase of 7.8% [4] - Surcharge revenue was reported at $130 million, below the average estimate of $137.76 million, reflecting a year-over-year decrease of 0.8% [4] - Net Sales for Performance Engineered Products were $104.90 million, compared to the estimated $108.01 million, showing a year-over-year increase of 2.4% [4] - Operating Income for Specialty Alloys Operations was $151.40 million, exceeding the average estimate of $143.25 million [4]

Financial Performance - Carpenter Technology reported quarterly earnings of $1.88 per share, exceeding the Zacks Consensus Estimate of $1.74 per share, and up from $1.19 per share a year ago, representing an earnings surprise of 8.05% [1] - The company posted revenues of $727 million for the quarter ended March 2025, slightly missing the Zacks Consensus Estimate by 0.62%, compared to $684.9 million in the same quarter last year [2] Stock Performance - Carpenter shares have increased approximately 12.4% since the beginning of the year, contrasting with the S&P 500's decline of 8.6% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $1.94 on revenues of $787.28 million, and for the current fiscal year, it is $6.95 on revenues of $2.91 billion [7] - The estimate revisions trend for Carpenter is mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Context - The Steel - Specialty industry, to which Carpenter belongs, is currently ranked in the bottom 5% of over 250 Zacks industries, suggesting potential challenges ahead [8]

Core Insights - Carpenter Technology Corporation reported its most profitable quarter in company history with an operating income of $137.8 million and earnings per diluted share of $1.88 for the fiscal third quarter ended March 31, 2025 [1][5][7] - The company exceeded its previous guidance for operating income and raised its fiscal year 2025 guidance to a range of $520 million to $527 million, representing a nearly 50% increase over fiscal year 2024 [3][4][5] Financial Performance - The company generated net sales of $727.0 million for the third quarter, an increase of $42.1 million (or 6%) compared to $684.9 million in the same quarter of fiscal year 2024 [6][17] - Adjusted operating income was $137.8 million, up 53% year-over-year, with an adjusted operating margin of 29.1% in the Specialty Alloys Operations segment, compared to 21.4% in the previous year [5][6][34] - The Specialty Alloys Operations segment achieved operating income of $151.4 million, exceeding expectations and up 46% year-over-year [4][5] Cash Flow and Share Repurchase - The company generated $34.0 million in adjusted free cash flow during the quarter, despite a discretionary pension contribution of $38.0 million [4][8] - Carpenter Technology repurchased $37.5 million in shares during the quarter, bringing total repurchases for the fiscal year to $77.8 million under its $400.0 million share repurchase program [4][9] Future Outlook - The company anticipates generating $250 million to $300 million in adjusted free cash flow for fiscal year 2025 and expects operating income for the fourth quarter to be between $146 million and $153 million [5][6] - Looking beyond fiscal year 2025, Carpenter Technology aims for operating income of $765 million to $800 million in fiscal year 2027, representing an approximate 25% compound annual growth rate (CAGR) over the two-year period [4][5][6]

Core Viewpoint - Carpenter Technology Corporation (CRS) is expected to report third-quarter fiscal 2025 results on April 24, with sales estimated at $731.5 million, reflecting a 6.8% year-over-year growth [1]. Financial Performance - The consensus estimate for CRS's earnings is $1.74 per share, indicating a 46.2% year-over-year growth, with a 2.9% increase in estimates over the past 60 days [2]. - CRS has a solid earnings surprise history, beating estimates in the last four quarters with an average surprise of 15.7% [3][4]. - The Earnings ESP for CRS is -0.18%, and it currently holds a Zacks Rank of 1 (Strong Buy) [8]. Segment Performance - The Specialty Alloys Operations segment is expected to report sales of $661 million, an 8.7% increase from the previous year, with an operating profit of $142 million, up from $103 million [11]. - Performance Engineered Products' net sales are projected to decline by 0.5% year-over-year to $102 million, with an operating profit expected to rise to $11.2 million from $9.2 million [12]. Market Trends - CRS has experienced growth in end-use markets, particularly in aerospace, defense, and medical applications, which is anticipated to continue throughout fiscal 2025 [9]. - Despite challenges from labor and chip shortages, increased productivity, higher prices, and improved product mix are expected to mitigate these issues [10]. - CRS shares have increased by 116.5% over the past year, significantly outperforming the industry average growth of 17.7% [13].

Core Viewpoint - Wall Street analysts expect Carpenter Technology (CRS) to report a quarterly earnings per share (EPS) of $1.74, reflecting a year-over-year increase of 46.2%, with revenues projected at $731.52 million, a 6.8% increase compared to the previous year [1]. Earnings Estimates - The consensus EPS estimate has been revised downward by 0.5% over the past 30 days, indicating a collective reassessment by analysts [2]. - Changes in earnings estimates are crucial for predicting investor reactions, as empirical research shows a strong correlation between earnings estimate revisions and short-term stock performance [3]. Revenue Projections - Analysts estimate 'Net Sales- End-Use Market Excluding Surcharge Revenue- Total' to reach $594.40 million, indicating a year-over-year change of +7.3% [5]. - 'Net Sales- End-Use Market Excluding Surcharge Revenue- Surcharge revenue' is projected at $137.76 million, reflecting a +5.1% change from the previous year [5]. - 'Net Sales- Performance Engineered Products' is expected to be $108.01 million, with a year-over-year change of +5.5% [6]. - 'Net Sales- Specialty Alloys Operations' is projected to reach $649.41 million, indicating a +6.7% change from the prior year [6]. Volume and Operating Income Estimates - 'Volumes Sold in Pounds - Specialty Alloys Operations' is expected to be 47.62 million, down from 50.85 million in the same quarter last year [7]. - 'Volumes Sold in Pounds' is forecasted to reach 49.04 million, compared to 50.21 million in the previous year [7]. - 'Operating Income- Performance Engineered Products' is projected at $10.36 million, up from $9.20 million in the same quarter last year [8]. - 'Operating Income- Specialty Alloys Operations' is expected to be $143.25 million, compared to $103.50 million in the prior year [8]. Stock Performance - Over the past month, Carpenter shares have recorded a return of -8.6%, while the Zacks S&P 500 composite has changed by -6.9% [9]. - Carpenter Technology holds a Zacks Rank 1 (Strong Buy), suggesting it is likely to outperform the overall market in the upcoming period [9].

Carpenter Technology (CRS) is expected to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended March 2025. This widely-known consensus outlook gives a good sense of the company's earnings picture, but how the actual results compare to these estimates is a powerful factor that could impact its near-term stock price.The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on Apr ...