Difficult start to fiscal year for Carpenter Technology

Carpenter Technology Corporation (NYSE:CRS) has announced financial results for the quarter ended September 30, 2014. The company reported net income of $13.5 million, compared to $34.6 million in the same quarter last year. Net sales for the first quarter of fiscal year 2015 were $549.8 million, and net sales excluding surcharge were $440.1 million, an increase of $28.0 million (7%) from the same quarter last year, on 11% higher shipments.

Operating income was reported at $22.1 million, a decrease of $33.7 million from the first quarter of the prior year. Operating income excluding pension earnings, interest and deferrals (EID) was $24.5 million, a decrease of $37.3 million (or 60%) from the first quarter of the prior year.

The reduction in operating income versus the prior year was stated as being primarily due to the operational issues experienced in the first two months of the current quarter, weaker mix and additional Athens depreciation expense.

“After a difficult start to the quarter, performance in September improved. The Latrobe press is now back on line and we saw our Specialty Alloys Operations (SAO) segment mix improve in September. That said, we need to drive further improvements and successfully work through recent challenges at our Reading mill,” stated William A Wulfsohn, Carpenter’s President and Chief Executive officer.

“Looking forward, we expect SAO to continue year-over-year volume growth as we expand the number of customer approvals for Athens production. We also anticipate that SAO’s sales mix will improve based on recent trends in our backlog. In addition, the Performance Engineered Products (PEP) segment is expected to improve year-over-year. Finally, we remain focused on keeping our selling, general and administrative expenses flat. These are the crucial building blocks in terms of driving profitable growth as we progress through our fiscal year,” added Wulfsohn.

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