Carpenter Technology Reports Second Quarter Fiscal Year 2026 Results
Rhea-AI Summary
Carpenter Technology (NYSE: CRS) reported record second-quarter operating income of $155.2M for the quarter ended December 31, 2025, a 31% increase year-over-year, and adjusted EPS of $2.33. Specialty Alloys Operations delivered $174.6M operating income and a 33.1% adjusted operating margin. The company generated $132.2M cash from operations, repurchased $32.1M of stock, and raised fiscal 2026 operating income guidance to $680M–$700M with at least $280M of adjusted free cash flow expected.
Positive
- Operating income +31% YoY to $155.2M
- SAO operating income $174.6M (best quarter on record)
- SAO adjusted operating margin expanded to 33.1% (up from 28.3% YoY)
- Cash from operations increased to $132.2M (vs $67.9M prior-year)
- Raised FY2026 operating income guidance to $680M–$700M (+30%–33% vs FY2025)
- Increased adjusted free cash flow outlook to at least $280M
Negative
- Recorded $15.6M debt extinguishment losses ($12.0M net of tax) in the quarter
- Capital expenditures rose to $46.3M (vs $29.3M prior-year quarter), pressuring near-term free cash flow
- GAAP EPS $2.09 below adjusted EPS of $2.33 due to special item
News Market Reaction
On the day this news was published, CRS declined 6.40%, reflecting a notable negative market reaction. Argus tracked a peak move of +3.5% during that session. Argus tracked a trough of -9.4% from its starting point during tracking. Our momentum scanner triggered 10 alerts that day, indicating notable trading interest and price volatility. This price movement removed approximately $1.13B from the company's valuation, bringing the market cap to $16.52B at that time. Trading volume was elevated at 2.5x the daily average, suggesting increased selling activity.
Data tracked by StockTitan Argus on the day of publication.
Key Figures
Market Reality Check
Peers on Argus
CRS was down 4.98% while key peers showed mixed, mostly modest moves (e.g., ATI -2.04%, WOR +1.17%). The magnitude and direction of CRS’s move diverge from the broader metal fabrication group, pointing to a company-specific reaction.
Previous Earnings Reports
| Date | Event | Sentiment | Move | Catalyst |
|---|---|---|---|---|
| Oct 23 | Q1 FY26 earnings | Positive | +22.7% | Record Q1 FY26 results with strong SAO margins and raised FY26 guidance. |
| Jul 31 | FY25 earnings | Positive | -12.1% | Record Q4 and FY25 performance and upbeat FY26–FY27 operating income outlook. |
| Apr 24 | Q3 FY25 earnings | Positive | +4.5% | Record Q3 FY25 income, rising SAO margins, higher FY25 guidance and buybacks. |
| Jan 30 | Q2 FY25 earnings | Positive | -7.4% | Record Q2 FY25 income, stronger SAO margins, and increased FY25 outlook. |
| Oct 24 | Q1 FY25 earnings | Positive | -1.5% | Record Q1 FY25 operating income, robust SAO growth, and high-end guidance. |
Earnings releases have been consistently strong but price reactions are mixed, with 3 of the last 5 earnings events seeing negative or muted moves despite positive operational momentum and raised guidance.
This announcement continues a multi-quarter trend of record results and rising guidance. Recent earnings releases highlighted record operating income in Q1 FY26 and FY25, expanding Specialty Alloys Operations margins, and repeated upgrades to full‑year operating income and free cash flow guidance. Share repurchases have been a recurring capital allocation theme under the $400.0M program. Today’s Q2 FY26 results, featuring higher operating income and upgraded FY26 guidance, build directly on that trajectory of margin expansion and aerospace demand strength.
Historical Comparison
Over the past five earnings releases, CRS averaged a 9.64% one-day move with mixed direction. Today’s roughly 5% decline is smaller than typical earnings volatility but fits the pattern of occasional negative reactions to strong results and raised guidance.
Earnings releases show a steady progression of record operating income, expanding SAO margins, rising free cash flow, and repeated increases to FY2025–FY2027 operating income targets.
Market Pulse Summary
The stock moved -6.4% in the session following this news. A negative reaction despite strong fundamentals fits prior patterns where earnings strength did not always translate into gains. Q2 FY26 featured record operating income of $155.2M, adjusted EPS of $2.33, and an increased FY26 operating income range of $680–700M. Yet past earnings have sometimes seen declines even on upbeat results. Investors may focus on expectations already embedded in the price, sensitivity to guidance ranges, and the impact of debt extinguishment costs and higher capital expenditures.
Key Terms
adjusted free cash flow financial
operating margin financial
senior unsecured notes financial
debt extinguishment losses financial
credit facility financial
AI-generated analysis. Not financial advice.
Delivered Record Quarterly Operating Income
Expanded Operating Margins in Specialty Alloys Operations Segment
Exceeded Second Quarter Operating Income Guidance for Specialty Alloys Operations Segment
Demand Accelerating in Aerospace and Defense End-Use Market with Higher Sequential Bookings
Completed Negotiations for Several Aerospace Long-Term Agreements with Significant Value Realization
Increased Operating Income Guidance for Fiscal Year 2026
PHILADELPHIA, Jan. 29, 2026 (GLOBE NEWSWIRE) -- Carpenter Technology Corporation (NYSE: CRS) (the “Company”) today announced financial results for the fiscal second quarter ended December 31, 2025. For the quarter, the Company reported operating income of
Second Quarter Fiscal Year 2026 Highlights
- Delivered
$155.2 million of operating income, up 31 percent year-over-year and a record second quarter result - Realized adjusted earnings per diluted share of
$2.33 in the quarter - Generated
$132.2 million of cash from operating activities - Exceeded expectations in Specialty Alloys Operations (“SAO”) segment with operating income of
$174.6 million, up 29 percent year-over-year - Delivered adjusted operating margin of 33.1 percent in the SAO segment, up from 32.0 percent sequentially and 28.3 percent year-over-year; sixteenth consecutive quarterly margin increase
- Bookings for Commercial Aerospace up 23 percent sequentially
- Completed negotiations on several long-term agreements with aerospace customers, with significant value realization
- Executed
$32.1 million in share repurchases against$400.0 million repurchase program
Outlook
- Increasing operating income guidance for fiscal year 2026 to be in the range of
$680 million to$700 million , representing a 30 percent to 33 percent increase over fiscal year 2025 - Increasing adjusted free cash flow outlook to be at least
$280 million in fiscal year 2026 - For the third quarter of fiscal year 2026, anticipate between
$177 million to$182 million in operating income - Well-positioned for continued growth beyond fiscal year 2027 with strong market demand outlook for our broad portfolio of specialized solutions, increasing productivity, optimizing product mix and pricing actions
“The second quarter of fiscal year 2026 generated
“The quarterly performance was driven by the SAO segment, which continued to expand adjusted operating margins. Reaching 33.1 percent in the quarter, up from 28.3 percent in the second quarter a year ago, the SAO segment realized
“Demand in our Aerospace and Defense end-use market continues to accelerate as customers gain confidence with the ramping build rates. Notably, we saw bookings for Commercial Aerospace increase 23 percent sequentially. Given the strong demand outlook, our customers continue to be focused on securing their supply. To that end, we completed negotiations on three additional long-term agreements with aerospace customers, realizing significant value.”
“Given the strong demand environment and the visibility we have for the second half of the fiscal year, we are raising our guidance to
“In addition, we expect to generate at least
“Looking over the long term, our broad portfolio of specialized solutions, increasing productivity, optimizing product mix and pricing actions will continue to drive growth well into the future. Together with our investments to accelerate growth, we are positioned to achieve and exceed our goals over the long-term.”
Financial Highlights
| Q2 | Q1 | Q2 | ||||||||
| ($ in millions, except per share amounts) | FY2026 | FY2026 | FY2025 | |||||||
| Net sales | $ | 728.0 | $ | 733.7 | $ | 676.9 | ||||
| Net sales excluding surcharge (a) | $ | 589.1 | $ | 603.1 | $ | 548.0 | ||||
| Operating income | $ | 155.2 | $ | 153.3 | $ | 118.9 | ||||
| Net income | $ | 105.3 | $ | 122.5 | $ | 84.1 | ||||
| Earnings per diluted share | $ | 2.09 | $ | 2.43 | $ | 1.66 | ||||
| Adjusted earnings per diluted share (a) | $ | 2.33 | $ | 2.43 | $ | 1.66 | ||||
| Net cash provided from operating activities | $ | 132.2 | $ | 39.2 | $ | 67.9 | ||||
| Adjusted free cash flow (a) | $ | 85.9 | $ | (3.4 | ) | $ | 38.6 | |||
| (a) Non-GAAP financial measures explained in the attached tables | ||||||||||
Net sales for the second quarter of fiscal year 2026 were
Operating income for the second quarter of fiscal year 2026 was
Cash provided from operating activities in the second 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
Special Item
During the quarter ended December 31, 2025, the Company recorded debt extinguishment losses of
Conference Call and Webcast Presentation
Carpenter Technology will host a conference call and webcast presentation today, January 29, 2026, at 10:00 a.m. ET, to discuss the financial results of operations for the second quarter of fiscal year 2026. Please dial +1 (646) 307-1963 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. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ from those projected, anticipated 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 quarter ended September 30, 2025, 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 cyber attacks and information technology or data security breaches; (17) the ability of suppliers to meet obligations due to supply chain disruptions or otherwise; (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, and regulatory risks relating to our global business, including geopolitical and diplomatic tensions, instabilities and conflicts, such as the war in Ukraine, the war between Israel and HAMAS, the war between Israel and Hezbollah, Houthi attacks on commercial shipping vessels and other naval vessels as well as compliance with U.S. and foreign trade and tax laws, sanctions, embargoes and other regulations; (21) challenges affecting the commercial aviation industry or key participants including, but not limited to production and other challenges at The Boeing Company; and (22) the consequences of the announcement, maintenance or use of Carpenter Technology’s share repurchase program. 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 | Six Months Ended | |||||||||||||
| December 31, | December 31, | |||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||
| NET SALES | $ | 728.0 | $ | 676.9 | $ | 1,461.7 | $ | 1,394.5 | ||||||
| Cost of sales | 509.7 | 499.4 | 1,027.0 | 1,040.7 | ||||||||||
| Gross profit | 218.3 | 177.5 | 434.7 | 353.8 | ||||||||||
| Selling, general and administrative expenses | 63.1 | 58.6 | 126.1 | 117.7 | ||||||||||
| Restructuring and asset impairment charges | — | — | — | 3.6 | ||||||||||
| Operating income | 155.2 | 118.9 | 308.6 | 232.5 | ||||||||||
| Interest expense, net | 10.2 | 12.2 | 21.7 | 24.6 | ||||||||||
| Debt extinguishment losses | 15.6 | — | 15.6 | — | ||||||||||
| Other (income) expense, net | (0.6 | ) | 1.6 | (3.5 | ) | 1.6 | ||||||||
| Income before income taxes | 130.0 | 105.1 | 274.8 | 206.3 | ||||||||||
| Income tax expense | 24.7 | 21.0 | 47.0 | 37.4 | ||||||||||
| NET INCOME | $ | 105.3 | $ | 84.1 | $ | 227.8 | $ | 168.9 | ||||||
| EARNINGS PER COMMON SHARE: | ||||||||||||||
| Basic | $ | 2.10 | $ | 1.68 | $ | 4.55 | $ | 3.37 | ||||||
| Diluted | $ | 2.09 | $ | 1.66 | $ | 4.52 | $ | 3.33 | ||||||
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | ||||||||||||||
| Basic | 50.1 | 50.2 | 50.1 | 50.2 | ||||||||||
| Diluted | 50.3 | 50.7 | 50.4 | 50.7 | ||||||||||
| Cash dividends per common share | $ | 0.20 | $ | 0.20 | $ | 0.40 | $ | 0.40 | ||||||
| PRELIMINARY CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions) (Unaudited) | ||||||||
| Six Months Ended | ||||||||
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| OPERATING ACTIVITIES | ||||||||
| Net income | $ | 227.8 | $ | 168.9 | ||||
| Adjustments to reconcile net income to net cash provided from operating activities: | ||||||||
| Depreciation and amortization | 72.1 | 68.1 | ||||||
| Noncash restructuring and asset impairment charges | — | 2.5 | ||||||
| Debt extinguishment losses | 15.6 | — | ||||||
| Deferred income taxes | 8.7 | (8.4 | ) | |||||
| Net pension expense | 7.2 | 12.4 | ||||||
| Share-based compensation expense | 11.6 | 9.8 | ||||||
| Net loss on disposals of property, plant and equipment | 0.4 | 0.5 | ||||||
| Changes in working capital and other: | ||||||||
| Accounts receivable | (26.0 | ) | (6.1 | ) | ||||
| Inventories | (27.9 | ) | (80.7 | ) | ||||
| Other current assets | (15.6 | ) | (6.8 | ) | ||||
| Accounts payable | (13.5 | ) | 3.6 | |||||
| Accrued liabilities | (73.2 | ) | (36.9 | ) | ||||
| Pension plan contributions | (11.5 | ) | (15.1 | ) | ||||
| Other postretirement plan contributions | (1.7 | ) | (1.8 | ) | ||||
| Other, net | (2.6 | ) | (1.9 | ) | ||||
| Net cash provided from operating activities | 171.4 | 108.1 | ||||||
| INVESTING ACTIVITIES | ||||||||
| Purchases of property, plant, equipment and software | (88.9 | ) | (56.2 | ) | ||||
| Net cash used for investing activities | (88.9 | ) | (56.2 | ) | ||||
| 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 | (11.4 | ) | — | |||||
| Payments for debt issue costs | (4.1 | ) | — | |||||
| Dividends paid | (20.1 | ) | (20.2 | ) | ||||
| Purchases of treasury stock | (81.2 | ) | (40.3 | ) | ||||
| Proceeds from stock options exercised | 13.2 | 3.9 | ||||||
| Withholding tax payments on share-based compensation awards | (55.2 | ) | (32.0 | ) | ||||
| Net cash used for financing activities | (166.7 | ) | (88.6 | ) | ||||
| Effect of exchange rate changes on cash and cash equivalents | 0.6 | (0.3 | ) | |||||
| DECREASE IN CASH AND CASH EQUIVALENTS | (83.6 | ) | (37.0 | ) | ||||
| Cash and cash equivalents at beginning of year | 315.5 | 199.1 | ||||||
| Cash and cash equivalents at end of period | $ | 231.9 | $ | 162.1 | ||||
| PRELIMINARY CONSOLIDATED BALANCE SHEETS (in millions) (Unaudited) | ||||||||
| December 31, | June 30, | |||||||
| 2025 | 2025 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 231.9 | $ | 315.5 | ||||
| Accounts receivable, net | 603.5 | 575.5 | ||||||
| Inventories | 822.3 | 793.8 | ||||||
| Other current assets | 98.3 | 79.9 | ||||||
| Total current assets | 1,756.0 | 1,764.7 | ||||||
| Property, plant, equipment and software, net | 1,394.6 | 1,359.4 | ||||||
| Goodwill | 227.3 | 227.3 | ||||||
| Other intangibles, net | 6.7 | 9.5 | ||||||
| Deferred income taxes | 8.0 | 7.8 | ||||||
| Other assets | 111.7 | 118.1 | ||||||
| Total assets | $ | 3,504.3 | $ | 3,486.8 | ||||
| LIABILITIES | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 270.1 | $ | 267.4 | ||||
| Accrued liabilities | 142.7 | 216.3 | ||||||
| Total current liabilities | 412.8 | 483.7 | ||||||
| Long-term debt | 690.1 | 695.4 | ||||||
| Accrued pension liabilities | 138.7 | 146.9 | ||||||
| Accrued postretirement benefits | 11.7 | 12.5 | ||||||
| Deferred income taxes | 172.2 | 162.8 | ||||||
| Other liabilities | 93.4 | 98.5 | ||||||
| Total liabilities | 1,518.9 | 1,599.8 | ||||||
| STOCKHOLDERS' EQUITY | ||||||||
| Common stock | 286.6 | 286.2 | ||||||
| Capital in excess of par value | 342.6 | 354.3 | ||||||
| Reinvested earnings | 1,917.9 | 1,710.2 | ||||||
| Common stock in treasury, at cost | (495.9 | ) | (395.8 | ) | ||||
| Accumulated other comprehensive loss | (65.8 | ) | (67.9 | ) | ||||
| Total stockholders' equity | 1,985.4 | 1,887.0 | ||||||
| Total liabilities and stockholders' equity | $ | 3,504.3 | $ | 3,486.8 | ||||
| PRELIMINARY SEGMENT FINANCIAL DATA (in millions, except pounds sold) (Unaudited) | |||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||
| December 31, | December 31, | ||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||
| Pounds sold ('000): | |||||||||||||||
| Specialty Alloys Operations | 46,836 | 44,714 | 91,586 | 94,814 | |||||||||||
| Performance Engineered Products | 2,218 | 2,208 | 4,502 | 4,840 | |||||||||||
| Intersegment | (656 | ) | (752 | ) | (1,266 | ) | (1,916 | ) | |||||||
| Consolidated pounds sold | 48,398 | 46,170 | 94,822 | 97,738 | |||||||||||
| Net sales: | |||||||||||||||
| Specialty Alloys Operations | |||||||||||||||
| Net sales excluding surcharge | $ | 527.3 | $ | 479.6 | $ | 1,061.2 | $ | 990.5 | |||||||
| Surcharge | 134.3 | 121.9 | 260.0 | 256.1 | |||||||||||
| Specialty Alloys Operations net sales | 661.6 | 601.5 | 1,321.2 | 1,246.6 | |||||||||||
| Performance Engineered Products | |||||||||||||||
| Net sales excluding surcharge | 77.2 | 86.2 | 164.4 | 178.5 | |||||||||||
| Surcharge | 6.0 | 8.8 | 12.3 | 17.3 | |||||||||||
| Performance Engineered Products net sales | 83.2 | 95.0 | 176.7 | 195.8 | |||||||||||
| Intersegment | |||||||||||||||
| Net sales excluding surcharge | (15.4 | ) | (17.8 | ) | (33.4 | ) | (43.6 | ) | |||||||
| Surcharge | (1.4 | ) | (1.8 | ) | (2.8 | ) | (4.3 | ) | |||||||
| Intersegment net sales | (16.8 | ) | (19.6 | ) | (36.2 | ) | (47.9 | ) | |||||||
| Consolidated net sales | $ | 728.0 | $ | 676.9 | $ | 1,461.7 | $ | 1,394.5 | |||||||
| Operating income (loss): | |||||||||||||||
| Specialty Alloys Operations | $ | 174.6 | $ | 135.6 | $ | 345.2 | $ | 270.2 | |||||||
| Performance Engineered Products | 6.9 | 7.0 | 16.3 | 14.3 | |||||||||||
| Corporate | (26.2 | ) | (23.6 | ) | (52.8 | ) | (51.6 | ) | |||||||
| Intersegment | (0.1 | ) | (0.1 | ) | (0.1 | ) | (0.4 | ) | |||||||
| Consolidated operating income | $ | 155.2 | $ | 118.9 | $ | 308.6 | $ | 232.5 | |||||||
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 expense 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) | ||||||||||||||||
| ADJUSTED OPERATING MARGIN EXCLUDING SURCHARGE REVENUE AND SPECIAL ITEM | Three Months Ended | Six Months Ended | ||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Net sales | $ | 728.0 | $ | 676.9 | $ | 1,461.7 | $ | 1,394.5 | ||||||||
| Less: surcharge revenue | 138.9 | 128.9 | 269.5 | 269.1 | ||||||||||||
| Net sales excluding surcharge revenue | $ | 589.1 | $ | 548.0 | $ | 1,192.2 | $ | 1,125.4 | ||||||||
| Operating income | $ | 155.2 | $ | 118.9 | $ | 308.6 | $ | 232.5 | ||||||||
| Special item: | ||||||||||||||||
| Restructuring and asset impairment charges | — | — | — | 3.6 | ||||||||||||
| Adjusted operating income | $ | 155.2 | $ | 118.9 | $ | 308.6 | $ | 236.1 | ||||||||
| Operating margin | 21.3 | % | 17.6 | % | 21.1 | % | 16.7 | % | ||||||||
| Adjusted operating margin excluding surcharge revenue and special item | 26.3 | % | 21.7 | % | 25.9 | % | 21.0 | % | ||||||||
| ADJUSTED SEGMENT OPERATING MARGIN EXCLUDING SURCHARGE REVENUE | Three Months Ended | Six Months Ended | ||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Specialty Alloys Operations | ||||||||||||||||
| Net sales | $ | 661.6 | $ | 601.5 | $ | 1,321.2 | $ | 1,246.6 | ||||||||
| Less: surcharge revenue | 134.3 | 121.9 | 260.0 | 256.1 | ||||||||||||
| Net sales excluding surcharge revenue | $ | 527.3 | $ | 479.6 | $ | 1,061.2 | $ | 990.5 | ||||||||
| Operating income | $ | 174.6 | $ | 135.6 | $ | 345.2 | $ | 270.2 | ||||||||
| Operating margin | 26.4 | % | 22.5 | % | 26.1 | % | 21.7 | % | ||||||||
| Adjusted operating margin excluding surcharge revenue | 33.1 | % | 28.3 | % | 32.5 | % | 27.3 | % | ||||||||
| ADJUSTED SEGMENT OPERATING MARGIN EXCLUDING SURCHARGE REVENUE | Three Months Ended | Six Months Ended | ||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Performance Engineered Products | ||||||||||||||||
| Net sales | $ | 83.2 | $ | 95.0 | $ | 176.7 | $ | 195.8 | ||||||||
| Less: surcharge revenue | 6.0 | 8.8 | 12.3 | 17.3 | ||||||||||||
| Net sales excluding surcharge revenue | $ | 77.2 | $ | 86.2 | $ | 164.4 | $ | 178.5 | ||||||||
| Operating income | $ | 6.9 | $ | 7.0 | $ | 16.3 | $ | 14.3 | ||||||||
| Operating margin | 8.3 | % | 7.4 | % | 9.2 | % | 7.3 | % | ||||||||
| Adjusted operating margin excluding surcharge revenue | 8.9 | % | 8.1 | % | 9.9 | % | 8.0 | % | ||||||||
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 December 31, 2025, as reported | $ | 130.0 | $ | (24.7 | ) | $ | 105.3 | $ | 2.09 | ||||
| Special item: | |||||||||||||
| Debt extinguishment losses | 15.6 | (3.6 | ) | 12.0 | 0.24 | ||||||||
| Three Months Ended December 31, 2025, as adjusted | $ | 145.6 | $ | (28.3 | ) | $ | 117.3 | $ | 2.33 | ||||
| * Impact per diluted share calculated using weighted average common shares outstanding of 50.3 million for the three months ended December 31, 2025. | |||||||||||||
| ADJUSTED EARNINGS PER DILUTED SHARE EXCLUDING SPECIAL ITEM | Earnings Before Income Taxes | Income Tax Expense | Net Income | Earnings Per Diluted Share* | |||||||||
| Three Months Ended December 31, 2024, as reported | $ | 105.1 | $ | (21.0 | ) | $ | 84.1 | $ | 1.66 | ||||
| Special item: | |||||||||||||
| None reported | — | — | — | — | |||||||||
| Three Months Ended December 31, 2024, as adjusted | $ | 105.1 | $ | (21.0 | ) | $ | 84.1 | $ | 1.66 | ||||
| * Impact per diluted share calculated using weighted average common shares outstanding of 50.7 million for the three months ended December 31, 2024. | |||||||||||||
| ADJUSTED EARNINGS PER DILUTED SHARE EXCLUDING SPECIAL ITEM | Earnings Before Income Taxes | Income Tax Expense | Net Income | Earnings Per Diluted Share* | |||||||||
| Six Months Ended December 31, 2025, as reported | $ | 274.8 | $ | (47.0 | ) | $ | 227.8 | $ | 4.52 | ||||
| Special item: | |||||||||||||
| Debt extinguishment losses | 15.6 | (3.6 | ) | 12.0 | 0.24 | ||||||||
| Six Months Ended December 31, 2025, as adjusted | $ | 290.4 | $ | (50.6 | ) | $ | 239.8 | $ | 4.76 | ||||
| * Impact per diluted share calculated using weighted average common shares outstanding of 50.4 million for the six months ended December 31, 2025. | |||||||||||||
| ADJUSTED EARNINGS PER DILUTED SHARE EXCLUDING SPECIAL ITEM | Earnings Before Income Taxes | Income Tax Expense | Net Income | Earnings Per Diluted Share* | |||||||||
| Six Months Ended December 31, 2024, as reported | $ | 206.3 | $ | (37.4 | ) | $ | 168.9 | $ | 3.33 | ||||
| Special item: | |||||||||||||
| Restructuring and asset impairment charges | 3.6 | (0.9 | ) | 2.7 | 0.06 | ||||||||
| Six Months Ended December 31, 2024, as adjusted | $ | 209.9 | $ | (38.3 | ) | $ | 171.6 | $ | 3.39 | ||||
| * Impact per diluted share calculated using weighted average common shares outstanding of 50.7 million for the six months ended December 31, 2024. | |||||||||||||
Management believes that earnings per share adjusted to exclude the impact of the 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 | Six Months Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| ADJUSTED FREE CASH FLOW | 2025 | 2024 | 2025 | 2024 | ||||||||||||
| Net cash provided from operating activities | $ | 132.2 | $ | 67.9 | $ | 171.4 | $ | 108.1 | ||||||||
| Purchases of property, plant, equipment and software | (46.3 | ) | (29.3 | ) | (88.9 | ) | (56.2 | ) | ||||||||
| Adjusted free cash flow | $ | 85.9 | $ | 38.6 | $ | 82.5 | $ | 51.9 | ||||||||
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 | Six Months Ended | |||||||||||
| December 31, | December 31, | |||||||||||
| NET SALES BY END-USE MARKET | 2025 | 2024 | 2025 | 2024 | ||||||||
| End-Use Market Excluding Surcharge Revenue: | ||||||||||||
| Aerospace and Defense | $ | 385.0 | $ | 333.8 | $ | 773.3 | $ | 683.7 | ||||
| Medical | 57.0 | 73.4 | 118.5 | 146.8 | ||||||||
| Energy | 38.4 | 32.2 | 81.0 | 71.6 | ||||||||
| Transportation | 17.3 | 21.4 | 35.2 | 42.5 | ||||||||
| Industrial and Consumer | 74.4 | 67.4 | 149.4 | 139.8 | ||||||||
| Distribution | 17.0 | 19.8 | 34.8 | 41.0 | ||||||||
| Total net sales excluding surcharge revenue | 589.1 | 548.0 | 1,192.2 | 1,125.4 | ||||||||
| Surcharge revenue | 138.9 | 128.9 | 269.5 | 269.1 | ||||||||
| Total net sales | $ | 728.0 | $ | 676.9 | $ | 1,461.7 | $ | 1,394.5 | ||||
| Investor Inquiries: | Media Inquiries: | |
| John Huyette | Heather Beardsley | |
| +1 610-208-2061 | +1 610-208-2278 | |
| jhuyette@cartech.com | hbeardsley@cartech.com |
FAQ
What did Carpenter Technology (CRS) report for Q2 FY2026 operating income on January 29, 2026?
How did Carpenter Technology's Specialty Alloys Operations perform in Q2 FY2026 (CRS)?
What guidance did Carpenter Technology (CRS) provide for fiscal year 2026 on January 29, 2026?
How much cash did Carpenter Technology (CRS) generate from operations in Q2 FY2026 and why does it matter?
Did Carpenter Technology (CRS) repurchase shares in Q2 FY2026 and what remains under the program?
