Carpenter Technology reports record first quarter operating income

Carpenter Technology Corporation (NYSE: CRS) reported first quarter fiscal year 2027 operating income of $196.4 million, a 28 percent increase year over year. The company stated this was the most profitable first quarter in its history, driven by productivity improvements, mix optimization, and pricing actions.

The Philadelphia-based firm generated $798.2 million in net sales for the quarter ended September 30, 2026, up 9 percent from $733.7 million in the prior year period. Excluding surcharges, net sales rose 5 percent to $634.8 million. Earnings per diluted share reached $3.25, compared to $2.43 in the first quarter of fiscal year 2026.

The Specialty Alloys Operations segment delivered $216.3 million in operating income, up 27 percent year over year. The segment achieved an adjusted operating margin of 37.7 percent, an improvement from 32.0 percent in the prior year first quarter and in line with the 37.8 percent recorded in the fourth quarter of fiscal year 2026.

Demand accelerated in the commercial aerospace supply chain, with bookings in aerospace structural and distribution sub-markets increasing 23 percent sequentially and 49 percent year over year. Tony R. Thene, Chairman, President and CEO of Carpenter Technology, attributed the results to customers gaining confidence in the industry’s ability to ramp production and to engine customers increasing activity for new builds and maintenance.

Capital expenditures rose to $77.7 million from $42.6 million in the same quarter last year, primarily due to a brownfield capacity expansion project. This increase contributed to free cash flow of negative $24.8 million, compared to negative $3.4 million in the prior year period. Cash provided from operating activities was $52.8 million, up from $39.2 million a year earlier.

The company executed $133.9 million in share repurchases during the quarter, purchasing 241,924 shares on the open market. As of September 30, 2026, $985.0 million remains available under the $1.0 billion share repurchase program authorized in August 2026. Total liquidity stood at $658.6 million, consisting of $159.5 million in cash and $499.1 million in available borrowings under its Credit Facility.

For the second quarter of fiscal year 2027, Carpenter Technology anticipates operating income between $192 million and $197 million. The company maintains its full-year fiscal year 2027 operating income outlook of $850 million to $880 million, representing a 21 to 25 percent increase over fiscal year 2026.