Specialty alloy maker
Carpenter Technology Corp.
) has landed a supply deal with Rolls-Royce, which will provide
the latter with advanced technology materials used to make jet
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The five-year agreement, which runs through 2017, is worth
roughly $75 million. The materials, to be supplied under the
contract, will be utilized on existing and future Rolls-Royce
engine platforms in applications including rings, blades, vanes,
Rolls-Royce will be responsible for generating demand for the
materials in the UK and the U.S. These materials will be made at
Carpenter's Reading, Pa., and Athens, Ala., specialty steelmaking
Carpenter, which is among the leading players in the specialty
steel industry along with
Allegheny Technologies Inc.
Haynes International, Inc.
), recently reported adjusted earnings (barring one-time items)
of 69 cents per share for third-quarter fiscal 2013 (ended Mar
31, 2013), missing the Zacks Consensus Estimate by 7 cents.
Profit, as reported, was essentially flat year over year at $32.9
million or 62 cents a share. Contributions of the Latrobe
Specialty Steel unit, which Carpenter bought in Feb 2012, were
neutralized by lower earnings in the Specialty Alloy Operations
(SAO) division due to weak mix and increased customer deferrals.
Carpenter raked in net sales of $581.4 million in the quarter, up
roughly 8% year over year. However, it missed the Zacks Consensus
Estimate of $636 million.
Sales were boosted by double-digit gains across the aerospace and
defense and energy markets. Growth in aerospace and defense was
aided by higher aircraft build rates while energy sales were
driven by a rise in ultra-premium materials sales. However, lower
titanium prices and high OEM inventories hurt sales in the
Carpenter continues to sees a double-digit year over year
expansion in adjusted operating income for fiscal 2013. However,
it noted that achieving this target will be difficult if the
fourth quarter experiences similar in-quarter mix and deferrals
as witnessed in the third quarter.
Carpenter currently retains a Zacks Rank #5 (Strong Sell).