Carpenter Technology reports first quarter results

Carpenter Technology Corporation has announced financial results for the quarter ended September 30 2015, reporting net income of $8.9 million or $0.18 per diluted share. Excluding restructuring charges and special items, earnings per share would have been $0.26 per diluted share in the quarter. This compares to a reported net income of $13.5 million or $0.25 per diluted share in the same quarter last year.

Net sales for the first quarter of fiscal year 2016 were $455.6 million, and net sales excluding surcharge were $385.1 million, a decrease of $55.0 million (or 12%) from the same quarter last year, on 19% lower volume.

Operating income was $24.8 million, an increase of $2.7 million from the first quarter of the prior year. Operating income, excluding pension earnings, interest and deferrals (EID) and restructuring charges and special items, was $32.6 million, an increase of $8.1 million (or 33%) from the first quarter of the prior year. These results reflect a stronger mix of products within the SAO segment and lower operating costs which were partially offset by lower overall volume.

“Overall I am encouraged by how the team has responded to the industry challenges in the quarter,” stated Tony Thene, Carpenter’s President and Chief Executive Officer.

“As we signalled in our most recent public comments, the weakness in the energy end-use market continues to impact our sequential volume and operating performance. We have also seen this market weakness begin to affect order patterns for customers in our industrial and consumer end-use market. These challenges coupled with our normal seasonality, resulted in a 15 percent sequential volume decline in the quarter.”

“We continued to drive operating cost improvements and reduce overhead costs in our Specialty Alloys Operations (SAO) segment as operating margins were relatively flat sequentially notwithstanding the significantly lower volume. The cost improvement initiatives are particularly important in this environment of declining volumes and will better position us to capitalise on the operating margin benefits from these cost structure changes as the volumes return.”

“As expected, our Performance Engineered Products (PEP) segment was impacted by the lower sequential demand in the current quarter for Aerospace titanium fastener materials and powder products for the Industrial and Consumer end-use market.  The operating income results of the Oil and Gas businesses in PEP were sequentially flat as we continue to manage cost structure and take appropriate actions as a result of the depressed activity in this end-use market.”

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