01—Abstract
Summary
Summary of the 10-Q filed April 29, 2026. Cited figures are marked; the original filing is the authoritative source.
Carpenter Technology Corporation (CRS) reported strong financial results for the third quarter and the first nine months of fiscal year 2026.
Net sales increased by 12% to $811.5 milliona for the quarter and by 7% to $2,273.2 million for the nine months, driven primarily by robust performance in the Specialty Alloys Operations (SAO) segment, particularly in the Aerospace and Defense and Energy end-use markets. The company saw significant improvements in profitability, with operating income growing by 35% to $186.5 million for the quarter, and by 32% to $495.1 million for the nine months. This growth was fueled by favorable product mix, pricing realization, and operational efficiencies.
Cash generation was also a key strength, with operating cash flow nearly doubling to $364.9 millionb for the nine months. The company is actively managing its capital allocation, investing in growth initiatives like a brownfield expansion project, returning cash to shareholders through dividends and share repurchases, and maintaining a strong liquidity position with over $790 million in cash and available credit. Looking ahead, Carpenter Technology anticipates continued demand acceleration in the Aerospace and Defense sector, positioning the company for sustained performance and long-term value creation.
02—Key points
Key Highlights
- Net sales increased by 12% year-over-year to $811.5 million for the third quarter of fiscal year 2026.
- Operating income surged by 35% to $186.5 million for the third quarter, reflecting improved margins.
- The Specialty Alloys Operations (SAO) segment delivered record operating performance with strong margin expansion.
- Net sales in the Aerospace and Defense end-use market increased by 17% for the quarter, signaling robust demand.
- Operating cash flow nearly doubled to $364.9 million for the first nine months of fiscal year 2026.
- The company maintained strong liquidity with $294.8 million in cash and $499.0 million in available credit.
- Carpenter Technology is investing in growth initiatives, including a brownfield expansion project.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2026, Carpenter Technology Corp kept $0.17.
- Revenue$811.5M100.0%
- Cost of revenue−$559.7M69.0%
- Gross profit$251.8M31.0%
- Operating costs−$65.3M8.0%
- Operating income$186.5M23.0%
- Interest, other & tax−$46.9M5.8%
- Net income$139.6M17.2%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2026filed April 29, 2026Financial Statements
Q3 FY2026 against Q3 FY2025
| Line item | Q3 FY2026Q3 FY2025 | Change |
|---|---|---|
| Revenue | $811.50M$727.00M | +11.6% |
| Gross Profit | $251.80M$200.80M | +25.4% |
| SG&A Expenses | $65.30M$63.00M | +3.7% |
| Operating Income | $186.50M$137.80M | +35.3% |
| Net Income | $139.60M$95.40M | +46.3% |
| EPS (Basic) | $2.79$1.90 | +46.8% |
| EPS (Diluted) | $2.77$1.88 | +47.3% |
| Shares Outstanding (Basic) | 50.00M50.20M | −0.4% |
| Shares Outstanding (Diluted) | 50.30M50.70M | −0.8% |
05—Questions
Frequently Asked Questions
What drove the significant increase in net sales and operating income?
The increase in net sales and operating income was primarily driven by a strong performance in the Specialty Alloys Operations (SAO) segment, fueled by a favorable product mix, successful pricing actions, and improved operational efficiencies. The Aerospace and Defense and Energy end-use markets showed particularly strong demand, contributing significantly to revenue growth.
How is Carpenter Technology managing its cash and capital allocation?
Carpenter Technology generated strong operating cash flow, nearly doubling year-over-year for the nine months ended March 31, 2026. The company is pursuing a balanced approach to capital allocation, which includes investing in growth initiatives like a brownfield expansion project, returning capital to shareholders through dividends and share repurchases, and maintaining a robust liquidity position through cash reserves and an available credit facility.
What is the outlook for the Aerospace and Defense segment?
Demand in the Aerospace and Defense end-use market is accelerating, driven by increasing build rates and the need to maintain aging fleets. Carpenter Technology sees this as a positive indicator of growing confidence in the aerospace supply chain and expects this trend to support sustained growth and long-term value creation.
Are there any significant risks or challenges highlighted in the report?
The report mentions ongoing monitoring of geopolitical risks, such as the evolving conflict among the United States, Israel, and Iran, and their potential impact on end-use markets. The company is also managing potential impacts from tariff changes and engaging with customers and suppliers to mitigate any effects. While generally able to pass through raw material cost increases via surcharges, a lag effect can sometimes impact margins. The company also faces inherent risks associated with the cyclical nature of the specialty materials business and potential fluctuations in raw material prices and currency exchange rates.
06—Continue