Carpenter Technology Q4 profit beats on higher margins, product mix

Overview

• US specialty alloy maker's Q4 sales rose 13% yr/yr but missed analyst expectations

• Adjusted EPS for Q4 beat analyst expectations, driven by higher margins and product mix

• Company repurchased $45.2 mln in shares during the quarter

Outlook

• Carpenter Technology expects FY2027 operating income between $850 mln and $880 mln

• Company expects FY2027 adjusted free cash flow of $400 mln to $430 mln

• Carpenter Technology sets FY2029 operating income target at $1.2 bln to $1.3 bln

Result Drivers

• SAO SEGMENT PERFORMANCE - Record operating income and margin expansion in the Specialty Alloys Operations segment, driven by productivity gains, pricing realization, and improved product mix

• HIGHER SHIPMENT VOLUME - Q4 net sales rose 13% yr/yr on 22% higher shipment volume

• AEROSPACE AND DEFENSE DEMAND - Net sales excluding surcharge in Aerospace and Defense end-use market rose 15% yr/yr

Company press release: ID:nGNX98dxqs

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 9 "strong buy" or "buy", 2 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the iron steel peer group is "buy"

• Wall Street's median 12-month price target for Carpenter Technology Corp is $466.00, about 12.2% below its July 29 closing price of $530.62

• The stock recently traded at 41 times the next 12-month earnings vs. a P/E of 34 three months ago

Reuters Recommended Reads

• July 27 - Nucor beats quarterly results on strong pricing, demand

• July 29 - Hexcel Q2 sales rise on commercial aerospace demand

• July 27 - TransDigm to buy metal parts maker Prince Izant for $1.07 billion

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)