Carpenter Technology Corporation
) is divesting two of its distribution businesses to focus more on
manufacturing and selling its core specialty alloy products for
The Pennsylvania-based company said that it has commenced a
process to sell its Latrobe Specialty Steel Distribution (LSSD) and
Mexican distribution business "Aceros Fortuna". KeyBanc Capital
Markets Inc. is assisting the company in selling these
The company acquired LSSD following its takeover of
high-performance materials maker Latrobe Specialty Steel in
February 2012 for roughly $558 million. LSSD, which logged sales of
$113 million in fiscal 2012, offers a vast range of quality steels
and value-added services to customers in North America through six
distribution centers across the U.S. and Canada.
Aceros Fortuna, which Carpenter bought in 1994, distributes
alloyed, stainless and tool steels, specialty alloys and industrial
products in Mexico and Brazil. The entity, which had sales of $42
million in fiscal 2012, has eight distribution and sales offices in
The divestiture reflects Carpenter's sustained commitment in
growing its specialty alloy business. The company plans to reinvest
the proceeds from a sale in its premium product businesses.
Carpenter noted that it will continue to service sales of its
special alloy products in Mexico and South America by retaining
selected warehouses and employees.
Carpenter makes specialty alloys, including stainless steels,
titanium alloys and superalloys primarily for the aerospace and
energy industries. It is a major player in the metallurgy industry
Allegheny Technologies Inc.
Carpenter, on July 31, reported its fourth-quarter fiscal 2012
(ended June 30) results. Its profit, as reported, surged 60% year
over year to $40.8 million or 77 cents per share. Legacy Carpenter
earnings (excluding Latrobe-related income and share dilution) were
80 cents a share. By that measure, it beat the Zacks Consensus
Estimate of 78 cents.
Revenues surged 33% year over year to $643.7 million, beating
the Zacks Consensus Estimate of $633 million. Sales were boosted by
solid growth in the Aerospace & Defense division. Revenues from
this segment spiked 49% on the back of strong demand for engine
materials and higher airplane build rates.
Carpenter expects a 30% rise in its operating income, excluding
pension expenses and costs related to Latrobe acquisition, in
fiscal 2013. The company said that its business remains resilient
to the global economic slowdown and it is well placed to expand its
share in the aerospace market.
Carpenter currently retains a Zacks #3 Rank, which translates
into a short-term Hold rating.
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