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Carpenter Technology (CRS) Q4 Earnings & Sales Top Estimates

Zacks Equity Research

Carpenter Technology CRS delivered adjusted net income of $48.9 million or $1.00 per share in the fourth quarter of fiscal 2019 (ended Jun 30, 2019), which beat the Zacks Consensus Estimate of 94 cents. Further, the figure was higher than the year-ago quarter’s net income of $42.8 million or 88 cents per share. Strong operational performance and healthy demand across key end-use markets led to the improvement in quarterly numbers.

Net sales of $641 million for the quarter rose 4% year over year and surpassed the Zacks Consensus Estimate of $628 million. Volumes were down 4% on a year-over-year basis.

Cost of goods sold in the reported quarter improved around 3% year over year to $519 million. Gross profit rose 7% year over year to $123 million in the reported quarter. Operating profit in the quarter was $68 million, advancing 13% from $60 million in the prior-year quarter. Operating margin was 10.6% in the quarter compared with 9.7% in the prior-year quarter. The company generated its strongest quarterly operating income performance since fiscal 2013. 

Carpenter Technology Corporation Price, Consensus and EPS Surprise

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 segment reported sales of $532 million compared with $498 million in the prior-year-quarter.  The segment sold 70,084 pounds, 4% lower than the prior-year quarter. Operating profit was $87 million, up 17% from the year-ago quarter.
 
The Performance Engineered Products’ net sales rose 8% year over year to $126 million in the reported quarter. The segment sold 4,180 pounds, 59% higher from the prior-year quarter.
 
Financials
 
Carpenter Technology exited fiscal 2019 with cash and cash equivalents of $27 million compared with $56.2 million at the end of fiscal 2018. The company’s long-term debt rose to $551 million at the end of the fiscal 2019 from $546 million as of fiscal 2018 end. Cash flow from operating activities were $232 million in fiscal 2019 compared with $209 million in the prior fiscal.

Fiscal 2019 Performance

Carpenter Technology’s adjusted net income was $168 million or $3.46 per share in fiscal 2019, up from fiscal 2018’s net income of $120 million or $2.50 per share. Adjusted earnings surpassed the Zacks Consensus Estimate of $3.23.

In fiscal 2019, net sales came in at    $2.38 billion, up 10% from the prior fiscal and also ahead of the Zacks Consensus Estimate of $2.37 billion.

Price Performance

Carpenter Technology’s shares have fallen 21.1% over the past year, compared with the industry's decline of 25.7%.

Zacks Rank & Other Key Picks

Carpenter Technology currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the basic materials space are SSR Mining Inc SSRM, Alamos Gold Inc AGI and Arconic Inc ARNC, all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

SSR Mining has an expected earnings growth rate of 134.8% for 2019. The company’s shares have surged 58.7% in the past year.

Alamos Gold has a projected earnings growth rate of a whopping 260% for the current year. The company’s shares have gained 35.6% in a year’s time.

Arconic has an estimated earnings growth rate of 38.2% for the ongoing year. Its shares have moved up 12.2% over the past year.

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