Carpenter Technology Reports Fourth Quarter and Fiscal Year 2026 Results
Rhea-AI Summary
Carpenter Technology (NYSE: CRS) reported fourth quarter FY2026 net sales of $851.0 million (up 13% year-over-year) and record operating income of $206.9 million, with earnings per diluted share of $3.23. Net sales excluding surcharge were $679.7 million, up 9% on 22% higher shipment volume. The Specialty Alloys Operations segment delivered $229.7 million of operating income and a record adjusted operating margin of 37.8%.
For FY2026, operating income was $702.0 million, 34% above FY2025 adjusted operating income, with net income of $529.8 million and EPS of $10.52. The company generated $605.0 million of operating cash flow and $362.3 million of adjusted free cash flow, repurchased $179.1 million of stock under a $400.0 million program, and ended the year with $892.4 million of liquidity. Carpenter Technology issued FY2027 operating income guidance of $850–$880 million and a FY2029 operating income target of $1.2–$1.3 billion.
Positive
- Q4 FY2026 operating income $206.9M, up 37% year-over-year and 11% sequentially
- SAO segment Q4 operating income $229.7M with record 37.8% adjusted margin
- FY2026 operating income $702.0M, 34% higher than FY2025 adjusted operating income
- FY2026 operating cash flow $605.0M; adjusted free cash flow $362.3M
- FY2027 operating income outlook $850–$880M, implying 21–25% growth vs FY2026
- Share repurchases FY2026 $179.1M under $400.0M authorization; $119.0M remaining
Negative
- Q4 FY2026 operating cash flow $240.1M, down from $258.0M in prior-year quarter
- Q4 FY2026 adjusted free cash flow $155.0M vs $201.3M a year earlier
- Q4 FY2026 capital expenditures $85.1M, up from $58.0M year-over-year
- FY2026 debt extinguishment losses $15.6M recorded in results
- FY2026 accounts receivable increased to $701.9M from $575.5M, using cash
News Explained
At June 30, the company reported $393.3 million of cash, with $119.0 million still available under its repurchase authorization.
Carpenter Technology reported completed fiscal 2026 results; at
During fiscal 2026, the company reported long-term debt issuance and repayments.
Capital expenditures were primarily reflecting the brownfield expansion, compared with
The company repurchased
Market reaction after 4Q26 earnings report: CRS -5.12%
Following this news, CRS has declined 5.12%, reflecting a notable negative market reaction. Our momentum scanner has triggered 7 alerts so far, indicating moderate trading interest and price volatility. The stock is currently trading at $503.47.
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Key Figures
Previous Earnings Reports
| Date | Event | Sentiment | 24h Move | Catalyst |
|---|---|---|---|---|
| Apr 29 | 3Q26 earnings | Positive | -5.0% | Record operating income, raised guidance, and stronger free cash flow expectations |
| Jan 29 | 2Q26 earnings | Positive | -6.4% | Record operating income, higher EPS, and increased fiscal-year guidance |
| Oct 23 | 1Q26 earnings | Positive | +22.7% | Record operating income, higher aerospace bookings, and raised fiscal-year guidance |
| Jul 31 | FY25 earnings | Positive | -12.1% | Record quarterly results, improved annual income, and new forward targets |
| Apr 24 | 3Q25 earnings | Positive | +4.5% | Record results, expanding margins, and raised annual operating-income guidance |
24h Move is the share-price change in the day after each event; other market factors may also have contributed.
Earnings announcements had mixed but predominantly negative 24-hour reactions despite positive operating updates.
Key Terms
adjusted free cash flow financial
adjusted operating margin financial
non-gaap financial measures financial
AI-generated analysis. How Rhea-AI works. Not financial advice.
Delivered Another Record Operating Income in Fourth Quarter
Drove Adjusted Quarterly Operating Margins in Specialty Alloys Operations Segment to Record 37.8 Percent
Fiscal Year 2026 Most Profitable Year in Company History; 34 Percent Higher than Fiscal Year 2025
Generated
Announced Fiscal Year 2027 Outlook and Fiscal Year 2029 Target for Operating Income
PHILADELPHIA, July 30, 2026 (GLOBE NEWSWIRE) -- Carpenter Technology Corporation (NYSE: CRS) (the “Company”) today announced financial results for the fiscal fourth quarter and year ended June 30, 2026. For the quarter, the Company reported operating income of
Fourth Quarter Highlights
- Delivered
$206.9 million of operating income, a record quarterly result, up 11 percent sequentially and 37 percent year-over-year - Realized earnings per diluted share of
$3.23 - Generated
$240.1 million of cash from operating activities and$155.0 million of adjusted free cash flow - Exceeded expectations in Specialty Alloys Operations (“SAO”) segment with operating income of
$229.7 million , up 10 percent sequentially and 38 percent year-over-year - Delivered record adjusting operating margin of 37.8 percent in the SAO segment, up from 35.6 percent in the previous quarter and 30.5 percent a year ago
- Executed
$45.2 million in share repurchases in the quarter
Fiscal Year 2026 Highlights
- Completed most profitable year on record, with
$702.0 million of adjusted operating income in fiscal year 2026, up 34 percent over fiscal year 2025 - Generated
$605.0 million of cash from operating activities and$362.3 million of adjusted free cash flow for fiscal year 2026 - Increased net sales excluding surcharge
15% year-over-year in Aerospace and Defense end-use market - Executed
$179.1 million of stock repurchases in fiscal year 2026 against$400.0 million share repurchase program
Outlook
- Expect fiscal year 2027 operating income to be in the range of
$850 million to$880 million , representing a 21 percent to 25 percent increase over fiscal year 2026 operating income - Expect to generate
$400 million to$430 million in adjusted free cash flow in fiscal year 2027 - For first quarter of fiscal year 2027, anticipate between
$195 million to$200 million in operating income - Well positioned for continued growth beyond fiscal year 2027 with strong market demand outlook for our broad portfolio of specialized solutions, increasing productivity, optimizing product mix and pricing actions
- Set medium-term target for operating income between
$1.2 billion to$1.3 billion in fiscal year 2029
“Carpenter Technology delivered another record quarter, generating
“The SAO segment drove the results, exceeding expectations with
“This is truly an exciting time to be part of Carpenter Technology. Over the last several years, the Company has fundamentally transformed itself, becoming stronger, more focused, and more profitable. We remain confident in our strategy, which has driven our transformation and positions us well to capture even greater opportunities ahead. We are focused on serving attractive, high-value end-use markets with applications where performance matters and failure is simply not an option.”
“With the record fiscal year 2026 now complete, we are establishing the fiscal year 2027 operating income outlook to be in the range of
“Looking beyond fiscal year 2027, we have introduced a fiscal year 2029 operating income target of
“The combination of our current performance, visible growth opportunities, and long-term strategic positioning creates a compelling value creation story. We are delivering record results today, we have a clear path to significant earnings growth over the next several years, and we are positioned to create substantial long-term value for our shareholders. Most importantly, we believe our greatest opportunities remain ahead of us.”
Financial Highlights
| Q4 | Q4 | YTD | YTD | |||||||||
| ($ in millions, except per share amounts) | FY2026 | FY2025 | FY2026 | FY2025 | ||||||||
| Net sales | $ | 851.0 | $ | 755.6 | $ | 3,124.2 | $ | 2,877.1 | ||||
| Net sales excluding surcharge (a) | $ | 679.7 | $ | 623.7 | $ | 2,527.5 | $ | 2,346.1 | ||||
| Operating income | $ | 206.9 | $ | 151.4 | $ | 702.0 | $ | 521.8 | ||||
| Adjusted operating income excluding special items (a) | $ | 206.9 | $ | 151.4 | $ | 702.0 | $ | 525.4 | ||||
| Net income | $ | 162.4 | $ | 111.7 | $ | 529.8 | $ | 376.0 | ||||
| Earnings per diluted share | $ | 3.23 | $ | 2.21 | $ | 10.52 | $ | 7.42 | ||||
| Adjusted earnings per diluted share (a) | $ | 3.23 | $ | 2.21 | $ | 10.76 | $ | 7.48 | ||||
| Net cash provided from operating activities | $ | 240.1 | $ | 258.0 | $ | 605.0 | $ | 440.4 | ||||
| Adjusted free cash flow (a) | $ | 155.0 | $ | 201.3 | $ | 362.3 | $ | 287.5 | ||||
| (a) non-GAAP financial measures explained in the attached tables | ||||||||||||
Net sales for the fourth quarter of fiscal year 2026 were
Operating income for the fourth quarter of fiscal year 2026 was
Cash provided from operating activities in the fourth quarter of fiscal year 2026 was
Under the Company’s authorized share repurchase program of up to
Total liquidity, including cash and available revolver balance, was
Conference Call and Webcast Presentation
Carpenter Technology will host a conference call and webcast presentation today, July 30, 2026, at 10:00 a.m. ET, to discuss the financial results of operations for the fourth quarter and full fiscal year 2026. Please dial +1 (585) 542-9983 for access to the live conference call. Access to the live webcast will be available at Carpenter Technology’s website (https://www.carpentertechnology.com), and a replay will soon be made available at https://www.carpentertechnology.com. Presentation materials used during this conference call will be available for viewing and download at https://www.carpentertechnology.com.
Non-GAAP Financial Measures
This press release includes discussions of financial measures that have not been determined in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”). A reconciliation of the non-GAAP financial measures to their most directly comparable financial measures prepared in accordance with GAAP, accompanied by reasons why the Company believes the non-GAAP measures are important, are included in the attached schedules.
About Carpenter Technology
Carpenter Technology Corporation is a recognized leader in high-performance specialty alloy materials and process solutions for critical applications in the aerospace and defense, medical, energy, transportation, and industrial and consumer markets. Founded in 1889, Carpenter Technology has evolved to become a pioneer in premium specialty alloys, including nickel, cobalt, and titanium and material process capabilities that solve our customers' current and future material challenges. More information about Carpenter Technology can be found at https://www.carpentertechnology.com.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Act of 1995. Forward-looking statements include, among other things, statements regarding guidance, outlook, targets, objectives, future operating performance, cash generation, capital allocation, market conditions and strategic initiatives. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ from those projected, anticipated, expected or implied. The most significant of these uncertainties are described in Carpenter Technology’s filings with the Securities and Exchange Commission, including its report on Form 10-K for the fiscal year ended June 30, 2025, Form 10-Q for the fiscal quarters ended September 30, 2025, December 31, 2025, and March 31, 2026, and the exhibits attached to those filings. They include but are not limited to: (1) the cyclical nature of the specialty materials business and certain end-use markets, including aerospace, defense, medical, energy, transportation, industrial and consumer, or other influences on Carpenter Technology's business such as new competitors, the consolidation of competitors, customers, and suppliers or the transfer of manufacturing capacity from the United States to foreign countries; (2) the ability of Carpenter Technology to achieve cash generation, growth, earnings, profitability, operating income, cost savings and reductions, qualifications, productivity improvements or process changes; (3) the ability to recoup increases in the cost of energy, raw materials, freight or other factors; (4) domestic and foreign excess manufacturing capacity for certain metals; (5) fluctuations in currency exchange and interest rates; (6) the effect of government trade actions, including tariffs; (7) the valuation of the assets and liabilities in Carpenter Technology's pension trusts and the accounting for pension plans; (8) possible labor disputes or work stoppages; (9) the potential that our customers may substitute alternate materials or adopt different manufacturing practices that replace or limit the suitability of our products; (10) the ability to successfully acquire and integrate acquisitions; (11) the availability of credit facilities to Carpenter Technology, its customers or other members of the supply chain; (12) the ability to obtain energy or raw materials, especially from suppliers located in countries that may be subject to unstable political or economic conditions; (13) Carpenter Technology's manufacturing processes are dependent upon highly specialized equipment located primarily in facilities in Reading and Latrobe, Pennsylvania and Athens, Alabama for which there may be limited alternatives if there are significant equipment failures or a catastrophic event; (14) the ability to hire and retain a qualified workforce and key personnel, including members of the executive management team, management, metallurgists and other skilled personnel; (15) fluctuations in oil and gas prices and production; (16) the impact of potential cybersecurity incidents, ransomware attacks, operational technology disruptions, information technology failures, data security breaches and failures of third-party technology service providers; (17) the ability of suppliers, logistics providers and other supply-chain participants to meet obligations due to capacity constraints, transportation disruptions, geopolitical events, labor shortages or other factors; (18) the ability to meet increased demand, production targets or commitments; (19) the ability to manage the impacts of natural disasters, climate change, pandemics and outbreaks of contagious diseases and other adverse public health developments; (20) geopolitical, economic, regulatory and security risks relating to our global business, including international conflicts, military actions, diplomatic tensions, trade restrictions, sanctions, disruptions to transportation corridors and shipping routes, and changes in U.S. and foreign trade, tax and regulatory requirements; (21) challenges affecting the commercial aviation industry or key participants including, but not limited to production and other challenges at The Boeing Company; (22) the consequences of the announcement, maintenance or use of Carpenter Technology’s share repurchase program; and (23) the ability to successfully execute major capital projects and brownfield expansion initiatives, including achieving expected costs, schedules, capacity additions, productivity improvements and returns on investment. Any of these factors could have an adverse and/or fluctuating effect on Carpenter Technology's results of operations. The forward-looking statements in this document are intended to be subject to the safe harbor protection provided by Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended. We caution you not to place undue reliance on forward-looking statements, which speak only as of the date of this press release or as of the dates otherwise indicated in such forward-looking statements. Carpenter Technology undertakes no obligation to update or revise any forward-looking statements.
| PRELIMINARY CONSOLIDATED STATEMENTS OF OPERATIONS (in millions, except per share data) (Unaudited) | ||||||||||||||
| Three Months Ended | Year Ended | |||||||||||||
| June 30, | June 30, | |||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||
| NET SALES | $ | 851.0 | $ | 755.6 | $ | 3,124.2 | $ | 2,877.1 | ||||||
| Cost of sales | 582.1 | 541.7 | 2,168.7 | 2,108.5 | ||||||||||
| Gross profit | 268.9 | 213.9 | 955.5 | 768.6 | ||||||||||
| Selling, general and administrative expenses | 62.0 | 62.5 | 253.5 | 243.2 | ||||||||||
| Restructuring and asset impairment charges | — | — | — | 3.6 | ||||||||||
| Operating income | 206.9 | 151.4 | 702.0 | 521.8 | ||||||||||
| Interest expense, net | 7.4 | 11.8 | 37.8 | 48.4 | ||||||||||
| Debt extinguishment losses | — | — | 15.6 | — | ||||||||||
| Other (income) expense, net | (5.2 | ) | 0.5 | (7.6 | ) | 6.1 | ||||||||
| Income before income taxes | 204.7 | 139.1 | 656.2 | 467.3 | ||||||||||
| Income tax expense | 42.3 | 27.4 | 126.4 | 91.3 | ||||||||||
| NET INCOME | $ | 162.4 | $ | 111.7 | $ | 529.8 | $ | 376.0 | ||||||
| EARNINGS PER COMMON SHARE: | ||||||||||||||
| Basic | $ | 3.25 | $ | 2.23 | $ | 10.59 | $ | 7.50 | ||||||
| Diluted | $ | 3.23 | $ | 2.21 | $ | 10.52 | $ | 7.42 | ||||||
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | ||||||||||||||
| Basic | 49.9 | 50.1 | 50.0 | 50.2 | ||||||||||
| Diluted | 50.2 | 50.6 | 50.4 | 50.7 | ||||||||||
| Cash dividends per common share | $ | 0.20 | $ | 0.20 | $ | 0.80 | $ | 0.80 | ||||||
| PRELIMINARY CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions) (Unaudited) | ||||||||
| Year Ended | ||||||||
| June 30, | ||||||||
| 2026 | 2025 | |||||||
| OPERATING ACTIVITIES | ||||||||
| Net income | $ | 529.8 | $ | 376.0 | ||||
| Adjustments to reconcile net income to net cash provided from operating activities: | ||||||||
| Depreciation and amortization | 147.1 | 139.2 | ||||||
| Noncash restructuring and asset impairment charges | — | 2.5 | ||||||
| Debt extinguishment losses | 15.6 | — | ||||||
| Deferred income taxes | 21.2 | (17.4 | ) | |||||
| Net pension expense | 14.6 | 24.8 | ||||||
| Share-based compensation expense | 26.4 | 22.8 | ||||||
| Net loss on disposal of property, plant, and equipment | 1.4 | 2.0 | ||||||
| Changes in working capital and other: | ||||||||
| Accounts receivable | (128.3 | ) | (1.8 | ) | ||||
| Inventories | (28.4 | ) | (60.4 | ) | ||||
| Other current assets | 20.0 | 13.7 | ||||||
| Accounts payable | 17.2 | (1.4 | ) | |||||
| Accrued liabilities | 3.1 | 13.7 | ||||||
| Pension plan contributions | (23.8 | ) | (64.8 | ) | ||||
| Other postretirement plan contributions | (4.0 | ) | (3.6 | ) | ||||
| Other, net | (6.9 | ) | (4.9 | ) | ||||
| Net cash provided from operating activities | 605.0 | 440.4 | ||||||
| INVESTING ACTIVITIES | ||||||||
| Purchases of property, plant, equipment and software | (242.7 | ) | (154.3 | ) | ||||
| Proceeds from disposals of property, plant and equipment and assets held for sale | — | 1.4 | ||||||
| Net cash used for investing activities | (242.7 | ) | (152.9 | ) | ||||
| FINANCING ACTIVITIES | ||||||||
| Proceeds from issuance of long-term debt, net of offering costs | 692.1 | — | ||||||
| Payments on long-term debt | (700.0 | ) | — | |||||
| Payments for debt extinguishment costs, net | (11.4 | ) | — | |||||
| Payments for debt issue costs | (4.1 | ) | — | |||||
| Dividends paid | (40.3 | ) | (40.3 | ) | ||||
| Purchases of treasury stock | (179.1 | ) | (101.9 | ) | ||||
| Proceeds from stock options exercised | 14.3 | 13.4 | ||||||
| Withholding tax payments on share-based compensation awards | (58.3 | ) | (38.3 | ) | ||||
| Net cash used for financing activities | (286.8 | ) | (167.1 | ) | ||||
| Effect of exchange rate changes on cash and cash equivalents | 2.3 | (4.0 | ) | |||||
| INCREASE IN CASH AND CASH EQUIVALENTS | 77.8 | 116.4 | ||||||
| Cash and cash equivalents at beginning of year | 315.5 | 199.1 | ||||||
| Cash and cash equivalents at end of year | $ | 393.3 | $ | 315.5 | ||||
| PRELIMINARY CONSOLIDATED BALANCE SHEETS (in millions) (Unaudited) | ||||||||
| June 30, | ||||||||
| 2026 | 2025 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 393.3 | $ | 315.5 | ||||
| Accounts receivable, net | 701.9 | 575.5 | ||||||
| Inventories | 822.9 | 793.8 | ||||||
| Other current assets | 63.1 | 79.9 | ||||||
| Total current assets | 1,981.2 | 1,764.7 | ||||||
| Property, plant, equipment and software, net | 1,487.9 | 1,359.4 | ||||||
| Goodwill | 227.3 | 227.3 | ||||||
| Other intangibles, net | 3.9 | 9.5 | ||||||
| Deferred income taxes | 5.5 | 7.8 | ||||||
| Other assets | 132.5 | 118.1 | ||||||
| Total assets | $ | 3,838.3 | $ | 3,486.8 | ||||
| LIABILITIES | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 313.4 | $ | 267.4 | ||||
| Accrued liabilities | 206.6 | 216.3 | ||||||
| Total current liabilities | 520.0 | 483.7 | ||||||
| Long-term debt | 690.7 | 695.4 | ||||||
| Accrued pension liabilities | 89.6 | 146.9 | ||||||
| Accrued postretirement benefits | 22.2 | 12.5 | ||||||
| Deferred income taxes | 196.9 | 162.8 | ||||||
| Other liabilities | 91.3 | 98.5 | ||||||
| Total liabilities | 1,610.7 | 1,599.8 | ||||||
| STOCKHOLDERS' EQUITY | ||||||||
| Common stock | 286.8 | 286.2 | ||||||
| Capital in excess of par value | 357.1 | 354.3 | ||||||
| Reinvested earnings | 2,199.7 | 1,710.2 | ||||||
| Common stock in treasury, at cost | (595.6 | ) | (395.8 | ) | ||||
| Accumulated other comprehensive loss | (20.4 | ) | (67.9 | ) | ||||
| Total stockholders' equity | 2,227.6 | 1,887.0 | ||||||
| Total liabilities and stockholders' equity | $ | 3,838.3 | $ | 3,486.8 | ||||
| PRELIMINARY SEGMENT FINANCIAL DATA (in millions, except pounds sold) (Unaudited) | |||||||||||||||
| Three Months Ended | Year Ended | ||||||||||||||
| June 30, | June 30, | ||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Pounds sold ('000): | |||||||||||||||
| Specialty Alloys Operations | 57,454 | 46,872 | 200,872 | 186,270 | |||||||||||
| Performance Engineered Products | 3,256 | 2,674 | 10,362 | 10,098 | |||||||||||
| Intersegment | (1,132 | ) | (800 | ) | (3,360 | ) | (3,388 | ) | |||||||
| Consolidated pounds sold | 59,578 | 48,746 | 207,874 | 192,980 | |||||||||||
| Net sales: | |||||||||||||||
| Specialty Alloys Operations | |||||||||||||||
| Net sales excluding surcharge | $ | 607.4 | $ | 548.0 | $ | 2,253.6 | $ | 2,057.9 | |||||||
| Surcharge | 163.1 | 126.1 | 573.2 | 505.7 | |||||||||||
| Specialty Alloys Operations net sales | 770.5 | 674.1 | 2,826.8 | 2,563.6 | |||||||||||
| Performance Engineered Products | |||||||||||||||
| Net sales excluding surcharge | 98.2 | 97.1 | 353.2 | 372.4 | |||||||||||
| Surcharge | 10.3 | 7.5 | 29.8 | 33.0 | |||||||||||
| Performance Engineered Products net sales | 108.5 | 104.6 | 383.0 | 405.4 | |||||||||||
| Intersegment | |||||||||||||||
| Net sales excluding surcharge | (25.9 | ) | (21.4 | ) | (79.3 | ) | (84.2 | ) | |||||||
| Surcharge | (2.1 | ) | (1.7 | ) | (6.3 | ) | (7.7 | ) | |||||||
| Intersegment net sales | (28.0 | ) | (23.1 | ) | (85.6 | ) | (91.9 | ) | |||||||
| Consolidated net sales | $ | 851.0 | $ | 755.6 | $ | 3,124.2 | $ | 2,877.1 | |||||||
| Operating income (loss): | |||||||||||||||
| Specialty Alloys Operations | $ | 229.7 | $ | 167.0 | $ | 782.9 | $ | 588.6 | |||||||
| Performance Engineered Products | 7.1 | 11.7 | 30.1 | 37.0 | |||||||||||
| Corporate | (28.6 | ) | (26.9 | ) | (108.7 | ) | (102.9 | ) | |||||||
| Intersegment | (1.3 | ) | (0.4 | ) | (2.3 | ) | (0.9 | ) | |||||||
| Consolidated operating income | $ | 206.9 | $ | 151.4 | $ | 702.0 | $ | 521.8 | |||||||
The Company has two reportable segments, Specialty Alloys Operations (“SAO”) and Performance Engineered Products (“PEP”).
The SAO segment is comprised of Carpenter's major premium alloy and stainless steel manufacturing operations. This includes operations performed at mills primarily in Reading and Latrobe, Pennsylvania and surrounding areas as well as South Carolina and Alabama.
The PEP segment is comprised of the Company’s differentiated operations. This segment includes the Dynamet titanium business, the Carpenter Additive business and the Latrobe and Mexico distribution businesses. The businesses in the PEP segment are managed with an entrepreneurial structure to promote flexibility and agility to quickly respond to market dynamics. It is our belief this model will ultimately drive overall revenue and profit growth. The pounds sold data above for the PEP segment includes only the Dynamet and Additive businesses.
Corporate costs are comprised of executive and director compensation, and other corporate facilities and administrative expenses not allocated to the segments. Also included are items that management considers not representative of ongoing operations and other specifically-identified income or expense items.
The service cost component of net pension expense, which represents the estimated cost of future pension liabilities earned associated with active employees, is included in the operating results of the business segments. The residual net pension is included in other (income) expense, net, and is comprised of the expected return on plan assets, interest costs on the projected benefit obligations of the plans, amortization of actuarial gains and losses and prior service costs.
PRELIMINARY
NON-GAAP FINANCIAL MEASURES
(in millions, except per share data)
(Unaudited)
| Three Months Ended | Year Ended | |||||||||||||||
| ADJUSTED OPERATING MARGIN EXCLUDING SURCHARGE REVENUE AND SPECIAL ITEM | June 30, | June 30, | ||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Net sales | $ | 851.0 | $ | 755.6 | $ | 3,124.2 | $ | 2,877.1 | ||||||||
| Less: surcharge revenue | 171.3 | 131.9 | 596.7 | 531.0 | ||||||||||||
| Net sales excluding surcharge revenue | $ | 679.7 | $ | 623.7 | $ | 2,527.5 | $ | 2,346.1 | ||||||||
| Operating income | $ | 206.9 | $ | 151.4 | $ | 702.0 | $ | 521.8 | ||||||||
| Special item: | ||||||||||||||||
| Restructuring and asset impairment charges | — | — | — | 3.6 | ||||||||||||
| Adjusted operating income | $ | 206.9 | $ | 151.4 | $ | 702.0 | $ | 525.4 | ||||||||
| Operating margin | 24.3 | % | 20.0 | % | 22.5 | % | 18.1 | % | ||||||||
| Adjusted operating margin excluding surcharge revenue and special item | 30.4 | % | 24.3 | % | 27.8 | % | 22.4 | % | ||||||||
| Three Months Ended | Year Ended | |||||||||||||||
| ADJUSTED SEGMENT OPERATING MARGIN EXCLUDING SURCHARGE REVENUE | June 30, | June 30, | ||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Specialty Alloys Operations | ||||||||||||||||
| Net sales | $ | 770.5 | $ | 674.1 | $ | 2,826.8 | $ | 2,563.6 | ||||||||
| Less: surcharge revenue | 163.1 | 126.1 | 573.2 | 505.7 | ||||||||||||
| Net sales excluding surcharge revenue | $ | 607.4 | $ | 548.0 | $ | 2,253.6 | $ | 2,057.9 | ||||||||
| Operating income | $ | 229.7 | $ | 167.0 | $ | 782.9 | $ | 588.6 | ||||||||
| Operating margin | 29.8 | % | 24.8 | % | 27.7 | % | 23.0 | % | ||||||||
| Adjusted operating margin excluding surcharge revenue | 37.8 | % | 30.5 | % | 34.7 | % | 28.6 | % | ||||||||
| Three Months Ended | Year Ended | |||||||||||||||
| ADJUSTED SEGMENT OPERATING MARGIN EXCLUDING SURCHARGE REVENUE | June 30, | June 30, | ||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Performance Engineered Products | ||||||||||||||||
| Net sales | $ | 108.5 | $ | 104.6 | $ | 383.0 | $ | 405.4 | ||||||||
| Less: surcharge revenue | 10.3 | 7.5 | 29.8 | 33.0 | ||||||||||||
| Net sales excluding surcharge revenue | $ | 98.2 | $ | 97.1 | $ | 353.2 | $ | 372.4 | ||||||||
| Operating income | $ | 7.1 | $ | 11.7 | $ | 30.1 | $ | 37.0 | ||||||||
| Operating margin | 6.5 | % | 11.2 | % | 7.9 | % | 9.1 | % | ||||||||
| Adjusted operating margin excluding surcharge revenue | 7.2 | % | 12.0 | % | 8.5 | % | 9.9 | % | ||||||||
Management believes that removing the impact of raw material surcharge from operating margin provides a more consistent basis for comparing results of operations from period to period, thereby permitting management to evaluate performance and investors to make decisions based on the ongoing operations of the Company. In addition, management believes that excluding the impact of special items from operating margin is helpful in analyzing the operating performance of the Company, as these items are not indicative of ongoing operating performance. Management uses its results excluding these amounts to evaluate its operating performance and to discuss its business with investment institutions, the Company’s board of directors and others.
| ADJUSTED EARNINGS PER DILUTED SHARE EXCLUDING SPECIAL ITEM | Earnings Before Income Taxes | Income Tax Expense | Net Income | Earnings Per Diluted Share* | |||||||||
| Three Months Ended June 30, 2026, as reported | $ | 204.7 | $ | (42.3 | ) | $ | 162.4 | $ | 3.23 | ||||
| Special item: | |||||||||||||
| None reported | — | — | — | — | |||||||||
| Three Months Ended June 30, 2026, as adjusted | $ | 204.7 | $ | (42.3 | ) | $ | 162.4 | $ | 3.23 | ||||
| * Impact per diluted share calculated using weighted average common shares outstanding of 50.2 million for the three months ended June 30, 2026. | |||||||||||||
| ADJUSTED EARNINGS PER DILUTED SHARE EXCLUDING SPECIAL ITEM | Earnings Before Income Taxes | Income Tax Expense | Net Income | Earnings Per Diluted Share* | |||||||||
| Three Months Ended June 30, 2025, as reported | $ | 139.1 | $ | (27.4 | ) | $ | 111.7 | $ | 2.21 | ||||
| Special item: | |||||||||||||
| None reported | — | — | — | — | |||||||||
| Three Months Ended June 30, 2025, as adjusted | $ | 139.1 | $ | (27.4 | ) | $ | 111.7 | $ | 2.21 | ||||
| * Impact per diluted share calculated using weighted average common shares outstanding of 50.6 million for the three months ended June 30, 2025. | |||||||||||||
| ADJUSTED EARNINGS PER DILUTED SHARE EXCLUDING SPECIAL ITEM | Earnings Before Income Taxes | Income Tax Expense | Net Income | Earnings Per Diluted Share* | |||||||||
| Year Ended June 30, 2026, as reported | $ | 656.2 | $ | (126.4 | ) | $ | 529.8 | $ | 10.52 | ||||
| Special item: | |||||||||||||
| Debt extinguishment losses | 15.6 | (3.6 | ) | 12.0 | 0.24 | ||||||||
| Year Ended June 30, 2026, as adjusted | $ | 671.8 | $ | (130.0 | ) | $ | 541.8 | $ | 10.76 | ||||
| * Impact per diluted share calculated using weighted average common shares outstanding of 50.4 million for the year ended June 30, 2026. | |||||||||||||
| ADJUSTED EARNINGS PER DILUTED SHARE EXCLUDING SPECIAL ITEM | Earnings Before Income Taxes | Income Tax Expense | Net Income | Earnings Per Diluted Share* | |||||||||
| Year Ended June 30, 2025, as reported | $ | 467.3 | $ | (91.3 | ) | $ | 376.0 | $ | 7.42 | ||||
| Special item: | |||||||||||||
| Restructuring and asset impairment charges | 3.6 | (0.9 | ) | 2.7 | 0.06 | ||||||||
| Year Ended June 30, 2025, as adjusted | $ | 470.9 | $ | (92.2 | ) | $ | 378.7 | $ | 7.48 | ||||
| * Impact per diluted share calculated using weighted average common shares outstanding of 50.7 million for the year ended June 30, 2025. | |||||||||||||
Management believes that earnings per diluted share adjusted to exclude the impact of special items is helpful in analyzing the operating performance of the Company, as these items are not indicative of ongoing operating performance. Management uses its results excluding these amounts to evaluate its operating performance and to discuss its business with investment institutions, the Company's board of directors and others.
| Three Months Ended | Year Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| ADJUSTED FREE CASH FLOW | 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Net cash provided from operating activities | $ | 240.1 | $ | 258.0 | $ | 605.0 | $ | 440.4 | ||||||||
| Purchases of property, plant, equipment and software | (85.1 | ) | (58.0 | ) | (242.7 | ) | (154.3 | ) | ||||||||
| Proceeds from disposals of property, plant and equipment and assets held for sale | — | 1.3 | — | 1.4 | ||||||||||||
| Adjusted free cash flow | $ | 155.0 | $ | 201.3 | $ | 362.3 | $ | 287.5 | ||||||||
Management believes that the presentation of adjusted free cash flow provides useful information to investors regarding our financial condition because it is a measure of cash generated which management evaluates for alternative uses. It is management’s current intention to use excess cash to fund investments in capital equipment, acquisition opportunities and consistent dividend payments. Additionally, we will discretionarily use excess cash for a share repurchase program up to
| PRELIMINARY SUPPLEMENTAL SCHEDULE (in millions) (Unaudited) | ||||||||||||
| Three Months Ended | Year Ended | |||||||||||
| June 30, | June 30, | |||||||||||
| NET SALES BY END-USE MARKET | 2026 | 2025 | 2026 | 2025 | ||||||||
| End-Use Market Excluding Surcharge Revenue: | ||||||||||||
| Aerospace and Defense | $ | 449.4 | $ | 383.8 | $ | 1,658.4 | $ | 1,440.7 | ||||
| Medical | 54.1 | 76.8 | 224.3 | 296.1 | ||||||||
| Energy | 39.2 | 44.6 | 170.7 | 151.3 | ||||||||
| Transportation | 22.6 | 22.0 | 77.1 | 86.4 | ||||||||
| Industrial and Consumer | 92.8 | 76.0 | 320.3 | 288.1 | ||||||||
| Distribution | 21.6 | 20.5 | 76.7 | 83.5 | ||||||||
| Total net sales excluding surcharge revenue | 679.7 | 623.7 | 2,527.5 | 2,346.1 | ||||||||
| Surcharge revenue | 171.3 | 131.9 | 596.7 | 531.0 | ||||||||
| Total net sales | $ | 851.0 | $ | 755.6 | $ | 3,124.2 | $ | 2,877.1 | ||||
| Investor Inquiries: | Media Inquiries: | |||
| John Huyette | Heather Beardsley | |||
| +1 610-208-2061 | +1 610-208-2278 | |||
| jhuyette@cartech.com | hbeardsley@cartech.com |
