Carpenter Technology Corp

Latest Results (30.03.2026):

Carpenter Technology Corp — second quarter of fiscal year 2026: The company reported a record quarterly operating income of $155.2 million for Q2 FY2026 (ended Dec. 31, 2025), with net sales of $728.0 million (up 8% year‑over‑year), GAAP diluted EPS of $2.09 and adjusted diluted EPS of $2.33 (excluding a $15.6 million debt‑extinguishment loss). Cash from operations was $132.2 million and the company raised full‑year fiscal 2026 guidance for operating income and adjusted free cash flow.

Quarterly financials

Operating income: $155.2M (record Q2, +31% YoY). Net sales: $728.0M (+8% YoY). GAAP diluted EPS: $2.09; adjusted diluted EPS (ex‑special item): $2.33.

Special item impact

Recorded $15.6M of debt extinguishment losses ($12.0M net of tax) in the quarter; adjusted results exclude this item (hence adjusted EPS of $2.33 vs. GAAP $2.09).

Segment performance — Specialty Alloys Operations (SAO)

SAO drove results with operating income of $174.6M (+29% YoY) and an adjusted SAO operating margin of 33.1% (up from 28.3% a year ago and +0.8 pts sequentially), marking the sixteenth consecutive quarterly margin increase.

Cash flow, capex and adjusted free cash flow

Q2 operating cash flow was $132.2M; Q2 adjusted free cash flow was $85.9M. Capital expenditures were $46.3M in the quarter (six‑month capex $88.9M), including investment in a brownfield expansion.

Guidance and outlook

Raised FY2026 operating income guidance to $680–700M (a 30–33% increase vs. FY2025) and increased adjusted free cash flow guidance to at least $280M; Q3 FY2026 operating income expected at $177–182M. Management expects continued growth beyond FY2027 driven by product mix, productivity and pricing actions.

Demand and commercial aerospace trends

Aerospace and Defense demand accelerated: bookings for Commercial Aerospace rose 23% sequentially, and Carpenter completed negotiations on multiple long‑term aerospace agreements with significant realized value.

Capital allocation and buybacks

Executed $32.1M of share repurchases in the quarter under a $400M repurchase program (approximately $216.9M remaining as of Dec. 31, 2025). Management plans a balanced use of cash for sustaining capex, growth investments and shareholder returns.

Balance sheet and liquidity

Total liquidity was $730.8M at quarter end (cash $231.9M; $498.9M available on the credit facility). The quarter included redemption of certain senior notes (leading to the debt extinguishment loss reported).