PHILADELPHIA, PA — Carpenter Technology Corp. (NYSE: CRS) forecast another sharp increase in operating income for fiscal 2027 after reporting record quarterly profit and the most profitable year in its history, supported by aerospace and defense demand, pricing gains and improved production efficiency.
The specialty alloys producer expects fiscal 2027 operating income of $850 million to $880 million, representing growth of 21% to 25% from fiscal 2026. Adjusted free cash flow is projected at $400 million to $430 million.
Carpenter also established a fiscal 2029 operating income target of $1.2 billion to $1.3 billion, reflecting expected contributions from capacity expansion, productivity gains, improved product mix and pricing.
For the fiscal fourth quarter ended June 30, operating income rose 37% from a year earlier to a record $206.9 million. Diluted earnings increased to $3.23 per share from $2.21.
Quarterly net sales climbed 13% to $851 million on a 22% increase in shipment volume. Sales excluding raw-material surcharges rose 9% to $679.7 million.
The Specialty Alloys Operations segment generated record operating income of $229.7 million, up 38% from the prior-year quarter and 10% sequentially. Its adjusted operating margin widened to 37.8% from 30.5% a year earlier.
Chairman and Chief Executive Officer Tony R. Thene attributed the margin expansion to “continued productivity gains, pricing realization across both long-term and transactional business, and improved product mix.”
Fiscal 2026 adjusted operating income reached $702 million, 34% above the previous year and the highest annual result in the company’s history.
Net sales excluding surcharges in the aerospace and defense market increased 15% for the year, reflecting continued demand for specialized materials used in high-performance applications.
Carpenter generated $605 million in cash from operating activities and $362.3 million in adjusted free cash flow during fiscal 2026.
Fourth-quarter operating cash flow declined to $240.1 million from $258 million a year earlier, while adjusted free cash flow fell to $155 million from $201.3 million. Higher working-capital requirements and spending on a brownfield capacity expansion offset the benefit of stronger earnings.
Capital expenditures increased to $85.1 million from $58 million in the prior-year quarter.
The company repurchased $45.2 million of stock during the quarter and $179.1 million during fiscal 2026 under a $400 million authorization. Carpenter had $119 million remaining under the program as of June 30.
Carpenter ended the fiscal year with $892.4 million in liquidity, including $393.3 million in cash and $499.1 million available under its revolving credit facility.
For the fiscal first quarter of 2027, the company expects operating income of $195 million to $200 million.
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