Carpenter Rises on UTC Deal - Analyst Blog

By
A A A

Carpenter Technology Corp. ( CRS ) has entered into a multi-level agreement with United Technologies Corporation (UTC) to supply the latter's Pratt & Whitney Division with superalloy powders. The market reacted positively to the news and Carpenter's shares rose as much as 3.3% following the announcement.

Carpenter is planning to build a superalloy powder facility which is expected to take about 18 months to construct at an expected cost of $20 million. Carpenter will supply Pratt & Whitney with superalloy powder for up to 20 years following the qualification of the facility by the latter.

Moreover, UTC's aerospace business units (Pratt & Whitney, Pratt & Whitney Canada Corp, UTC Aerospace Systems and Sikorsky Aircraft Corporation) have agreed to buy alloy steel bar/billet, nickel superalloy billet, stainless bar/billet, and strip laminate products from Carpenter for a period of ten years. Carpenter presently supplies UTC's aerospace businesses with a part of their overall demand for nickel, stainless and strip laminate products.

Carpenter expects that the deal will enable a yield over $600 million in sales over the term of the agreement, and should lead to further increase in sales. The company's entry into the aerospace market segment reflects its confidence in superalloy powder demand for additional applications such as those used in energy and additive manufacturing.

Carpenter, a prominent player in the specialty steel industry along with Allegheny Technologies Inc. ( ATI ), Haynes International, Inc. ( HAYN ) and RTI International Metals, Inc. ( RTI ), is a leader in the development, manufacture and distribution of cast/wrought and powder metal stainless steels and specialty alloys.

Carpenter's broad product portfolio includes high temperature (iron-nickel-cobalt base), stainless, superior corrosion resistant, controlled expansion alloys, ultra high-strength and implantable alloys, tool and die steels, and other specialty metals as well as cast/wrought titanium alloys.

Carpenter currently retains a Zacks Rank #3 (Hold).



ALLEGHENY TECH (ATI): Free Stock Analysis Report

CARPENTER TECH (CRS): Free Stock Analysis Report

HAYNES INTL INC (HAYN): Free Stock Analysis Report

RTI INTL METALS (RTI): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: ATI , CRS , HAYN , RTI

Zacks.com

Zacks.com

More from Zacks.com:

Related Videos

Ramp Sports
Ramp Sports                         

Stocks

Referenced

Most Active by Volume

88,066,694
  • $97.19 ▲ 2.61%
58,241,731
  • $71.29 ▲ 2.92%
51,058,864
  • $44.87 ▲ 0.09%
48,927,829
  • $28.75 ▲ 0.81%
46,551,917
    $15.52 unch
40,249,498
  • $3.46 ▼ 0.57%
38,633,031
  • $22.43 ▼ 9.63%
38,240,825
  • $34.71 ▲ 3.30%
As of 7/23/2014, 04:04 PM