Carpenter Technology (CRS) investor relations material

Executive summary

• Record Q1 FY2027 operating income was $196.4 million, up 28% YoY; diluted EPS was $3.25 versus $2.43 and net income was $162.5 million.

• Results benefited from strengthening demand, productivity gains, mix management and pricing actions despite planned preventive-maintenance downtime.

Financial highlights

• Net sales were $798.2 million, up 9% YoY; sales excluding surcharge revenue were $634.8 million, up 5%.

• Gross profit was $256.3 million versus $216.4 million; adjusted gross margin excluding surcharge revenue was 40.4% versus 35.9%.

• SG&A was $59.9 million versus $63.1 million, reflecting lower variable compensation costs; effective tax rate was 15.5%.

• Consolidated operating margin was 24.6% versus 20.9%; adjusted operating margin excluding surcharge revenue was 30.9% versus 25.4%.

Outlook and guidance

• FY2027 operating income guidance is $850 million–$880 million, up 21%–25% over FY2026; management cited potential upside from volume, productivity and pricing.

• Q2 FY2027 operating income is expected at $192 million–$197 million, including holiday production downtime; SAO outlook is $214 million–$218 million and PEP is expected to be similar to Q1.

• FY2027 free cash flow target remains $400 million–$430 million; cash generation is expected to accelerate in Q2 and H2 as inventory declines.

• FY2029 operating income target is $1.2 billion–$1.3 billion, representing a 20%–23% three-year CAGR; the brownfield expansion is expected to support growth.

• FY2027 capital expenditures, including the Athens brownfield expansion, are expected at $355 million–$375 million.