10-QPeriod: Q2 FY2026

CARPENTER TECHNOLOGY CORP Quarterly Report for Q2 Ended Dec 31, 2025

Filed January 29, 2026For Securities:CRS

Summary

Carpenter Technology Corporation (CRS) reported strong financial results for the quarter and six months ended December 31, 2025. Net sales increased by 8% and 5% respectively, driven by robust demand in key end-use markets like Aerospace & Defense and Energy. The company demonstrated significant operational improvements, leading to a substantial increase in operating income and margins, particularly within the Specialty Alloys Operations (SAO) segment, which achieved its best quarter on record. This performance was bolstered by favorable product mix, pricing actions, and enhanced operational efficiencies. Financially, the company generated strong operating cash flow, up from the prior year, and maintained a healthy adjusted free cash flow. Carpenter Technology also made strategic moves during the period, including refinancing its debt by issuing $700 million in Senior Notes and extending its Credit Facility maturity. The company continues to return value to shareholders through dividends and a share repurchase program, with a significant portion of the repurchase authorization still available. Management expresses confidence in continued long-term growth driven by favorable market dynamics and strategic positioning.

Financial Highlights

49 data points
Beta

Revenue

$728.00M

30.0% Gross Margin

Net Income

$105.30M

14.5% Net Margin

EPS (Diluted)

$2.09

Total Assets

$3.50B

Cash & Equivalents

$231.90M

Free Cash Flow

$132.20M

Financial Statements
Beta
Revenue$728.00M
Gross Profit$218.30M
SG&A Expenses$63.10M
Operating Income$155.20M
Net Income$105.30M
EPS (Basic)$2.10
EPS (Diluted)$2.09
Shares Outstanding (Basic)50.10M
Shares Outstanding (Diluted)50.30M

Key Highlights

  • 1Net sales increased by 8% to $728.0 million for the three months ended December 31, 2025, compared to the prior year period.
  • 2Operating income significantly improved to $155.2 million (21.3% margin) for the three months ended December 31, 2025, up from $118.9 million (17.6% margin) in the prior year.
  • 3Specialty Alloys Operations (SAO) segment achieved record performance, with operating income of $174.6 million and an adjusted operating margin of 33.1%.
  • 4Generated $171.4 million in cash from operating activities for the six months ended December 31, 2025, a substantial increase from $108.1 million in the prior year.
  • 5Successfully refinanced debt by issuing $700.0 million in 5.625% Senior Notes due 2034 and extending its revolving credit facility maturity to November 2030.
  • 6Returned $20.1 million to shareholders via dividends and repurchased $81.2 million of common stock during the six months ended December 31, 2025.
  • 7Aerospace & Defense and Energy end-use markets showed strong sales growth, with Aerospace & Defense up 14% and Energy up 17% year-over-year for the three-month period.

Frequently Asked Questions

Revenue growth was primarily driven by an 8% increase in net sales to $728.0 million. This was fueled by strong performance in key end-use markets, particularly Aerospace and Defense (up 14% year-over-year) and Energy (up 17% year-over-year). The company also benefited from realized price increases, an improved product mix, and the ongoing effectiveness of its raw material surcharge mechanisms.

Carpenter Technology made significant strategic debt management moves. In November 2025, it issued $700 million of 5.625% Senior Notes due 2034, using the proceeds to repay existing senior notes. Additionally, the company amended and restated its Credit Facility, extending its maturity to November 2030 and maintaining a significant available borrowing capacity of $498.9 million as of December 31, 2025.

Management is optimistic about the company's future, projecting continued growth driven by strong dynamics in its core markets, especially Aerospace & Defense and Energy. The Specialty Alloys Operations (SAO) segment, which has seen sixteen consecutive quarters of increasing adjusted operating margins, is expected to continue its strong performance. The company is investing in growth initiatives, including a brownfield expansion project, and believes it is well-positioned to achieve its long-term goals.

Carpenter Technology is committed to returning capital to shareholders through a balanced approach. This includes consistent dividend payments, with $20.1 million paid during the six months ended December 31, 2025. The company also actively repurchases its common stock under an authorized $400 million program, having spent $81.2 million in the six months ended December 31, 2025, with $216.9 million still available under the program.