Carpenter Technology (CRS) Q3 2025 earnings summary

Executive summary

• Achieved record quarterly operating income of $137.8M, up 53% year-over-year, and EPS of $1.88, driven by improved product mix, pricing actions, and operational efficiencies, especially in Aerospace & Defense and Energy markets.

• SAO segment delivered $151.4M operating income, up 46% year-over-year, with a 29.1% adjusted operating margin.

• Net income for Q3 was $95.4M ($1.88 per diluted share), up from $6.3M ($0.12) in the prior year quarter.

• Generated $74.2M in operating cash flow and $34.0M in adjusted free cash flow; repurchased $37.5M in shares during the quarter.

• Order intake rose over 20% sequentially, with continued urgent customer demand and new long-term supply agreements concluded.

Financial highlights

• Net sales rose 6% year-over-year to $727.0M; gross profit margin for Q3 was 27.6% (33.6% excluding surcharge revenue).

• Adjusted operating income was $137.8M, 53% higher than the prior year quarter; adjusted operating margin reached 23.1%.

• Earnings per diluted share reached $1.88 for the quarter; adjusted EPS was $1.88 vs. $1.19 last year.

• Generated $34.0M in adjusted free cash flow and $74.2M in operating cash flow; liquidity at $500.4M, including $151.5M cash.

• Repurchased $37.5M in shares during the quarter, totaling $77.8M year-to-date under a $400M authorization.

Outlook and guidance

• Raised full-year FY2025 operating income guidance to $520M–$527M, nearly 50% above FY2024.

• Projecting $250M–$300M in adjusted free cash flow for FY2025.

• FY2027 operating income outlook set at $765M–$800M, representing a ~25% CAGR over two years.

• Q4 FY2025 operating income expected at $146M–$153M; expects $1B in free cash flow from FY25–FY27 with a 90% conversion rate.

• Capital expenditures for FY2025 projected at $155M–$160M, including brownfield expansion.