Carpenter Technology Q2 Earnings Beat Estimates, Revenues Rise 8% Y/Y

Carpenter Technology Corporation CRS reported adjusted earnings of $2.33 per share for second-quarter fiscal 2026, beating the Zacks Consensus Estimate of $2.20. It had posted adjusted earnings of $1.66 in the year-ago quarter. The upside was driven by ongoing improvements in the product mix and expanding operating efficiencies.

Including one-time items, earnings per share were $2.09 in the quarter compared with $1.66 in the year-ago quarter.

Carpenter Technology Corporation Price, Consensus and EPS Surprise

 

Carpenter Technology Corporation price-consensus-eps-surprise-chart | Carpenter Technology Corporation Quote

Net revenues increased 7.5% year over year to $728 million in the reported quarter. The figure missed the Zacks Consensus Estimate of $729 million. 

CRS witnessed a year-over-year revenue increase of 15.3% in the Aerospace and Defense end-use market. Revenues in the Energy end-market rose 19.3%. The metric for the Medical end-use markets moved down 22.3%. Revenues in the Distribution markets decreased 14.1%, whereas Industrial and Consumer end-use market revenues rose 10.1%. The Transportation end-use market’s revenues fell 19.2%

CRS’s Q2 Operational Results

The cost of goods sold in second-quarter fiscal 2026 moved up 2.1% year over year to $510 million. Gross profit increased 23% year over year to $218 million. The gross margin came in at 30% compared with the prior-year quarter’s 26.2%. 

Adjusted operating income in the reported quarter was a record $155 million compared with the prior-year quarter’s $119 million. The adjusted operating margin in the quarter under review was 21.3% compared with 17.6% in the year-ago quarter.

Carpenter Technology’s Q2 Segmental Performance

The Specialty Alloys Operations segment reported sales of $662 million compared with the prior-year quarter’s $602 million. We predicted the segment’s sales to be $672 million. The segment sold 46,836 pounds compared with the year-ago quarter’s 44,714 pounds. The reported figure missed our estimate of 44,956 pounds. The segment posted an operating profit of $175 million compared with the prior-year quarter’s $136 million. Our estimate for the segment’s operating profit was $171 million.

The Performance Engineered Products’ net sales fell 12.4% year over year to $83 million. The reported figure missed our estimate of $99 million. The segment sold 2,218 pounds compared with the year-ago quarter’s 2,208 pounds. It was higher than our projection of 2,199 pounds. The segment reported an operating profit of $6.9 million, a dip of 1.4% year over year. Our estimate for the segment’s operating profit was $9.4 million.

CRS’ Cash Flow & Balance Sheet Updates

Carpenter Technology ended second-quarter fiscal 2026 with cash and cash equivalents of $232 million compared with $315.5 million at the end of fiscal 2025. The long-term debt was $690 million at the end of the quarter compared with $695 million as of the end of fiscal 2025. 

Cash flow from operating activities was $132 million in the quarter under review compared with $68 million in the prior-year quarter.

Carpenter Technology’s Guidance for FY26

CRS expects operating income of $680-$700 million for fiscal 2026 compared with the prior stated $660-$700 million. 

It expects the fiscal third-quarter operating income to be $177-$182 million.

CRS’s Share Price Performance

Shares of the company have surged 66.9% in the past year compared with the industry’s growth of 72.6%.

Carpenter Technology’s Zacks Rank

CRS currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Peer Performance

Commercial Metals Company CMC reported earnings per share of $1.84 for the first quarter of fiscal 2026 compared with 78 cents in the year-ago quarter. Commercial Metals’ bottom line beat the Zacks Consensus Estimate of $1.55. 
The company’s net revenues in the reported quarter were $2.12 billion, up 11% year over year. The reported figure beat the Zacks Consensus Estimate of $1.99 billion.

Steel - Specialty Stock Awaiting Results

Metallus Inc. MTUS is scheduled to release fourth-quarter fiscal 2025 results on Feb. 19. The Zacks Consensus Estimate for Metallus’s fourth-quarter fiscal 2025 earnings is pegged at 5 cents per share. MTUS reported a loss of 8 cents in the year-ago quarter. The Zacks Consensus Estimate for Metallus’ top line is pegged at $290 million, indicating growth of 20% from the prior-year reported figure.

NWPX Infrastructure, Inc. NWPX is scheduled to release fourth-quarter fiscal 2025 results soon. 

The Zacks Consensus Estimate for NWPX Infrastructure’s fourth-quarter fiscal 2025 earnings is pegged at 62 cents per share, indicating a year-over-year dip of 38%. The Zacks Consensus Estimate for NWPX Infrastructure’s top line is pegged at $121.5 million, indicating growth of 1.6% from the prior-year reported figure.

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This article originally published on Zacks Investment Research (zacks.com).

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