CRS Tops Q3 Earnings Estimates, Raises FY25 Operating Profit View

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]