PHILADELPHIA, PA — Carpenter Technology Corporation (NYSE: CRS) reported its most profitable fiscal year in company history, capping off 2025 with record quarterly operating income and adjusted free cash flow. The company now expects even stronger performance ahead, forecasting a 26% to 33% increase in operating income for fiscal 2026.
For the fiscal fourth quarter ended June 30, Carpenter posted operating income of $151.4 million, up 21% from the same quarter a year ago. Earnings per diluted share reached $2.21, while adjusted free cash flow hit $201.3 million, fueled by strong demand in aerospace, defense, and energy markets.
The Specialty Alloys Operations (SAO) segment led the quarter, delivering $167 million in operating income and a 30.5% margin—both new highs.
For the full fiscal year, Carpenter generated $525.4 million in adjusted operating income, a 48% increase over 2024. Adjusted free cash flow for the year totaled $287.5 million. Aerospace and defense now account for over 60% of the company’s total revenue, reflecting a strategic realignment toward high-demand sectors.
CEO Tony Thene credited the strong results to productivity gains, a favorable product mix, and ongoing pricing actions. “This completes the most profitable year in Carpenter Technology’s history,” said Thene, noting that the company continues to execute on its long-term growth strategy.
2026 and Beyond: Strong Guidance and Expansion Plans
Looking ahead, Carpenter expects fiscal 2026 operating income to range between $660 million and $700 million. Free cash flow is projected to come in between $240 million and $280 million. First-quarter operating income is expected to land between $148 million and $152 million.
The company reaffirmed its long-term target of $765 million to $800 million in adjusted operating income by fiscal 2027—a nearly 25% compound annual growth rate from 2025. To support that growth, Carpenter is investing in a brownfield expansion that will add melting capacity and bolster output in key product lines.
Fourth quarter net sales came in at $755.6 million, down 5% year-over-year due to a 14% drop in shipment volume. However, net sales excluding surcharge declined just 2%, reflecting improved pricing and product mix.
Capital Strategy and Liquidity
Carpenter continued to return capital to shareholders, repurchasing $24.1 million in stock during the quarter. For the full fiscal year, buybacks totaled $101.9 million. Another $298.1 million remains available under its current $400 million repurchase authorization. The company also paid $40.3 million in dividends during the year.
Capital expenditures rose to $58 million in the quarter, up from $27.7 million in the prior-year period, aligning with the company’s infrastructure investments.
Carpenter ended the fiscal year with total liquidity of $664.4 million, including $315.5 million in cash and $348.9 million in available credit.
With robust demand in aerospace, defense, medical, and power generation markets—and a growing portfolio of advanced materials—Carpenter Technology appears well-positioned to sustain its growth trajectory through 2027 and beyond.
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