Carpenter Technology (CRS) Posts Narrower-Than-Expected Loss in Q1
Carpenter Technology Corporation CRS reported first-quarter fiscal 2022 (ended Sep 30, 2021) adjusted loss per share of 28 cents. The figure, however, came in narrower than the Zacks Consensus Estimate of loss per share of 38 cents. The company had reported adjusted loss per share of 58 cents in the year-ago period.
Including one-time items, the company posted a loss per share of 31 cents compared with the year-ago quarter’s 98 cents.
Net sales increased 9.7% year over year to $388 million in the reported quarter. The figure, however, missed the Zacks Consensus Estimate of $428 million.
The company witnessed a year-over-year revenue decline of 8.5% in the Aerospace and Defense end-use market. Revenues in the Energy end-market slid 24% year on year. Revenues in the Medical end-use markets increased 23.6%, year over year. Revenues in the distribution and industrial end-use markets climbed 29.8% and 5%, year over year, respectively. Transportation end-use market sales also grew 28.1% year over year.
Operational Results
Cost of goods sold in first-quarter fiscal 2022 was up 3.6% year over year to $362 million. Gross profit came in at $25.2 million compared with the year-ago quarter’s $3.5 million. The adjusted operating loss in the reported quarter was $17.5 million compared with the prior-year quarter’s $30.9 million.
Carpenter Technology Corporation Price, Consensus and EPS Surprise
Carpenter Technology Corporation price-consensus-eps-surprise-chart | Carpenter Technology Corporation Quote
Segment Performance
The Specialty Alloys Operations (SAO) segment reported sales of $332 million, reflecting year-over-year growth of 10.3%. The segment sold 43,008 pounds compared with the year-ago quarter’s 43,368 pounds. It posted an operating loss of $5.9 million compared with the $18.6 million seen in the prior-year quarter.
The Performance Engineered Products’ (PEP) net sales increased 20.7% year over year to $75 million during the fiscal first quarter. The segment sold 2,372 pounds, 61.8% higher than the year-ago figure. The segment reported an operating profit of $0.6 million as against the prior year quarter’s operating loss of $3.6 million.
Financials
Carpenter Technology ended the fiscal first quarter with cash and cash equivalents of $213 million compared with $287 million at the end of fiscal 2021. Long-term debt was $694.8 million at the end of first-quarter fiscal 2022 compared with $694.5 million as of fiscal 2021 end. Cash utilized in operating activities was $47 million in the fiscal first quarter as against the cash inflow of $88 million in the prior-year quarter.
Free cash outflow in the reported quarter was $71.2 million as against the cash inflow of $62.6 million in the year-ago quarter.
Outlook
The company expects to benefit from the improving demand trends across its end-use markets. Carpenter Technology’s investment in additive manufacturing and soft magnetics will strengthen the company’s growth prospects in the near term.
Price Performance
Carpenter Technology’s shares have gained 84.5% over the past year compared with the industry's appreciation of 77.7%.
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Zacks Rank & Stocks to Consider
Carpenter Technology currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the basic materials space are Nucor Corporation NUE, Olin Corporation OLN and Nutrien Ltd. NTR. All of these stocks currently flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Nucor has a projected earnings growth rate of around 580% for the current year. The company’s shares have soared 131% in a year’s time.
Olin has an expected earnings growth rate of around 689% for the current fiscal year. The company’s shares have surged 249% in the past year.
Nutrien has an anticipated earnings growth rate of around 180% for 2021. The company’s shares have gained 74% in the past year.
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