Highlights

  • Net income for the quarter ended September 30, 2026 was $162.5 million, or $3.25 per diluted share, compared with $2.43.
  • Net sales were $798.2 million and operating income was $196.4 million, compared with $733.7 million and $153.3 million a year earlier.
  • Carpenter repurchased 241,924 shares for $133.9 million, and $985.0 million remains available under its $1.0 billion share repurchase program.
  • Fiscal 2027 capital expenditures are expected at $355.0 million to $375.0 million, including the brownfield expansion in Athens, Alabama.

Carpenter Technology Corporation (NYSE: CRS) shares were trading at USD 280.81 on October 27, 2026, down 3.00%, with a relative volume at time of 2.39. The specialty alloys producer filed its Form 10-Q and held its earnings call on October 22, 2026 for the fiscal first quarter ended September 30, 2026, and gave a second quarter operating income outlook.

Carpenter Technology is a Delaware corporation with principal executive offices at 1735 Market Street in Philadelphia, Pennsylvania. Founded in 1889, it produces and distributes premium specialty alloys, including titanium alloys, powder metals, stainless steels, alloy steels and tool steels, for aerospace and defense, medical, energy, transportation, and industrial and consumer markets. It reports two segments, Specialty Alloys Operations (SAO) and Performance Engineered Products (PEP),. Its fiscal year ends June 30.

First Quarter Fiscal 2027 Results

For the three months ended September 30, 2026, net sales were $798.2 million, up 9 percent from $733.7 million. Excluding surcharge revenue, a non-GAAP measure, net sales were $634.8 million, up 5 percent. Gross profit was $256.3 million, or 32.1 percent of net sales, compared with $216.4 million, or 29.5 percent.

Operating income was $196.4 million, or 24.6 percent of net sales, compared with $153.3 million, or 20.9 percent. Income tax expense was $29.9 million, a 15.5 percent rate, including discrete tax benefits of $12.1 million attributable to employee share-based compensation. Net income was $162.5 million, compared with $122.5 million.

Aerospace and Defense sales were $534.6 million, up 14 percent. Medical sales were $65.5 million, down 12 percent, and Energy sales were $46.5 million, down 15 percent.

By segment, SAO net sales were $730.4 million with operating income of $216.3 million, or 29.6 percent of net sales. PEP net sales were $91.1 million, down 3 percent, with operating income of $7.3 million, compared with $9.4 million. The company said PEP results reflected a reduction in Medical end-use market sales in Titanium.

Cash Flow, Liquidity and Capital Returns

Cash from operating activities was $52.8 million, compared with $39.2 million. Capital expenditures were $77.7 million, compared with $42.6 million, and free cash flow, a non-GAAP measure, was negative $24.8 million, compared with negative $3.4 million.

Total liquidity was $658.6 million at September 30, 2026, including cash and cash equivalents of $159.5 million and $499.1 million available under the unsecured credit facility, which has a commitment of $500.0 million and matures November 20, 2030. The company had no short-term borrowings and reported compliance with all covenants. The consolidated net leverage ratio was 0.59 to 1.00.

Dividends of $9.9 million were paid, at $0.20 per share per quarter. The company repurchased 241,924 shares on the open market for $133.9 million.

Outlook

The filing states that fiscal 2027 capital expenditures, including the brownfield expansion, are expected to be $355.0 million to $375.0 million, and that net pension expense is expected to be $5.9 million.

On the October 22, 2026 call, management said it expects second quarter fiscal 2027 total operating income of $192 million to $197 million, with SAO operating income of $214 million to $218 million. It said it continues to anticipate fiscal 2027 free cash flow of $400 million to $430 million, and an effective tax rate near the low end of a 20% to 22% range. Management also said defense bookings declined on both a sequential and year-over-year basis, which it attributed to funding challenges within the defense supply chain.

The company said it is monitoring the conflict among the United States, Israel and Iran and ongoing tariff changes, and that it uses surcharge mechanisms to pass through raw material and tariff costs. About 43 percent of net sales in the quarter were under firm price sales arrangements.