Specialty alloy maker
Carpenter Technology Corp.
) reported earnings of 62 cents per share for second-quarter
fiscal 2013 (ended Dec 31, 2012), exceeding earnings of 52 cents
a share recorded a year ago. That also beat the Zacks Consensus
Estimate by a penny.
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Profit surged roughly 40% year over year to $33 million. The
bottom line was boosted by higher demand for premium and
ultra-premium products and the contributions of the Latrobe
Specialty Steel unit, which the company bought in Feb 2012.
Carpenter Technology, a major player in the specialty steel
industry along with
Allegheny Technologies Inc.
), raked in net sales of $533.5 million in the quarter, up 24%
year over year. However, it missed the Zacks Consensus Estimate
of $549 million. Barring surcharge revenues, sales cruised 30% to
Sales were boosted by solid gains across the aerospace and
defense and energy markets. However, the prevailing economic
uncertainty hurt the demand for the company's low value product
lines in the second quarter.
By segment, revenues (excluding surcharge) from the Specialty
Alloy Operations (SAO) unit rose 7% year over year to $277.1
million led by gains in premium and ultra-premium products.
Performance Engineered Products (PEP) segment revenues climbed
13% to $91.7 million on the back of the addition of Specialty
Steel Supply (SSS) energy distribution business.
The Latrobe segment contributed sales of $101.4 million in the
reported quarter. The unit includes the Latrobe Specialty
Steel Distribution (LSSD) and Mexican distribution businesses
that are planned for divestiture.
By market, revenues from aerospace and defense surged 30% to
$250.3 million on the back of strong demand for engine materials
and higher airplane build rates. Energy sales soared 30% to $79.5
million driven by higher demand for material used in oil and gas
Revenues from the medical market, however, dipped 16% to $26.6
million on weak demand for medical materials. Transportation
sales edged up 1% to $31.8 million. The company recently entered
into a collaboration agreement with
) to develop lighter high-strength steel for automotive
applications. The deal underscores strong opportunities in the
Carpenter ended the quarter with cash and cash equivalents of
$63.1 million, down 80% year over year. Total long-term debt was
$406 million, essentially flat year over year.
The company sees a 20%-30% year-over-year rise in operating
income for fiscal 2013. Its continued investment across the
aerospace and energy markets is expected to drive results over
the next several years.
Carpenter Technology currently retains a Zacks Rank #4