CRS · Carpenter Technology Corporation

Carpenter Technology Corporation delivered another record quarter with Q3 FY2026 operating income of $186.5 million, surpassing prior records through strong execution in its Specialty Alloys Operations (SAO) segment, which posted $208.0 million in operating income and an adjusted operating margin of 35.6%, up from 33.1% in Q2 and 29.1% in the prior-year quarter. This margin expansion stemmed from productivity gains, pricing realization on long-term and transactional business, and an optimized product mix. Net sales rose 12% year-over-year to $811.5 million, with net sales excluding surcharge up 10% to $655.6 million, reflecting robust demand acceleration in the Aerospace and Defense end-use market, evidenced by sequential bookings growth in the commercial aerospace structural sub-market. Cash generation was exceptional at $193.5 million from operations and $124.8 million in adjusted free cash flow, supporting $52.7 million in share repurchases under the $400 million program, with $164.2 million remaining. Management, led by Chairman and CEO Tony R. Thene, highlighted the company's positioning amid rising aerospace build rates and long-term agreements ensuring volume and pricing stability. Guidance was raised significantly: Q4 operating income to $205-$210 million and full-year FY2026 to $700-$705 million (at least 33% above FY2025), alongside adjusted free cash flow to ~$350 million, underscoring confidence in sustained growth into FY2027 driven by market demand, productivity, and strategic pricing.