CRS Tops Q3 Earnings Estimates, Raises FY25 Operating Profit View

Carpenter Technology Corporation CRS reported earnings of $1.88 per share for third-quarter fiscal 2025, surpassing the Zacks Consensus Estimate of $1.74. The bottom line marked an improvement of 58% from adjusted earnings of $1.19  per share in the year-ago quarter. The upside is driven by ongoing improvements in the product mix and operating efficiencies.

Net revenues increased 6.1% year over year to $727 million in the reported quarter. However, the figure missed the Zacks Consensus Estimate of $732 million. Shipment volumes were down 7% year over year. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

By end-markets, CRS witnessed a year-over-year revenue increase of 18.4% in Aerospace and Defense, and 25.9% in Energy. Meanwhile, revenues in Transportation end-markets were down 16.7%, Distribution dipped 5.2%, and Industrial and Consumer declined 6.1%. Revenues in the Medical end-markets were down 14%.

CRS’s Gross Margin Rises Y/Y in Q3

The cost of goods sold declined 2.2% year over year to $526 million. The gross profit rose 36.6% year over year to $201 million. The gross margin came in at 27.6% compared with the prior-year quarter’s 21.5%. 

The adjusted operating income was a record $138 million, a solid 53.1% jump from the prior-year quarter’s $90 million.

Carpenter Technology’s Q3 Segmental Performance

The Specialty Alloys Operations segment reported revenues  of $643 million compared with the prior-year quarter’s $608.5 million. We predicted the segment sales to be $661 million. The segment sold 44,584 pounds compared with the year-ago quarter’s 50,846 pounds. The reported figure missed our estimate of 47,742 pounds.

The segment posted an operating profit of $151 million compared with the prior-year quarter’s $103.5 million. Our projection for the same was $142 million.

The Performance Engineered Products’ net revenues fell 0.7% year over year to $95 million. The reported figure missed our estimate of $102 million. The segment sold 2,584 pounds compared with the year-ago quarter’s 2,618 pounds. The figure was higher than our projection of 2,569 pounds.

Segmental operating profit was $10.9 million compared with the prior-year quarter’s $9.2 million. Our projection for the same was $11.2 million.

CRS’s Cash Flow & Balance Sheet Updates

Carpenter Technology ended third-quarter fiscal 2025 with cash and cash equivalents of $151.5 million compared with $199 million at the end of fiscal 2024. The long-term debt was around $695 million at the end of the quarter compared with $694 as of the end of fiscal 2024.

Cash flow from operating activities was $74.2 million in third-quarter fiscal 2025 compared with the prior-year quarter’s $83.4 million.

Carpenter Technology’s Guidance for Q4 & FY25

Backed by a record performance in the third quarter of 2025, Carpenter Technology is raising its fiscal 2025 operating income guidance to $520-$527 million from the prior started $500-$520 million. 

It expects the fiscal fourth-quarter operating income to be $146-$153 million.

CRS Stock’s Share Price Performance

Shares of the company have gained 145.1% in the past year compared with the industry’s growth of 29.6%.

Carpenter Technology’s Zacks Rank

The company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

CRS’s Peer Performance

Commercial Metals Company CMC reported adjusted earnings per share of 26 cents in second-quarter fiscal 2025 (ended Feb. 28, 2025), missing the Zacks Consensus Estimate of 31 cents. Commercial Metals’ bottom line plunged 64% year over year from the prior-year quarter’s 73 cents.

Net revenues of Commercial Metals in the reported quarter were $1.75 billion compared with the year-ago quarter’s $1.85 billion. The reported figure missed the Zacks Consensus Estimate of $1.77 billion.

Steel - Speciality Stocks Awaiting Results

ATI Inc. ATI, scheduled to release first-quarter fiscal 2025 results on May 1, has a trailing four-quarter average surprise of 10.8%. The Zacks Consensus Estimate for ATI’s first-quarter fiscal 2025 earnings is pegged at 58 cents per share, implying year-over-year growth of 20.8%.

The Zacks Consensus Estimate for ATI’s top line is pegged at $1.06 billion, indicating growth of 1.9% from the prior-year reported figure.

Metallus Inc. MTUS, expected to release first-quarter fiscal 2025 results on May 8, has a trailing four-quarter average surprise of negative 287.9%. The Zacks Consensus Estimate for Metallus’ first-quarter fiscal 2025 earnings is pegged at 11 cents per share, implying a year-over-year plunge of 80.4%.

The Zacks Consensus Estimate for Metallus’ top line is pegged at $254 million, indicating a fall of 20.9% from the prior-year reported figure.

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

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