Carpenter Technology (CRS) Misses Q1 EPS by 40c, Revenues Miss

Carpenter Technology (NYSE: CRS) reported Q1 EPS of ($0.98), $0.40 worse than the analyst estimate of ($0.58). Revenue for the quarter came in at $353.3 million versus the consensus estimate of $371 million.

“During the first quarter, we further strengthened our liquidity position through solid operating and free cash flow generation,” said Tony R. Thene, President and CEO of Carpenter Technology. “While our targeted inventory reduction efforts impacted profitability, we believe managing for cash flow in the current environment is prudent and helped us finish the first quarter with over $600 million in total liquidity. As anticipated, our operating results in the quarter were also impacted by lower volume due to challenging conditions in the Aerospace and Defense and Medical end-use markets that continue to be pressured as a result of COVID-19. Our facilities remain operational which speaks to the dedication of all of our employees as well as the benefits of our safety-driven culture and enhanced protocols.”

“Looking ahead, the headwinds from COVID-19 will continue to impact demand levels across our key end-use markets in our upcoming second quarter and we will remain in constant contact with our customers to address their evolving material requirements. Despite the near-term challenges related to COVID-19, the long-term outlook for our end-use markets is solid and we will continue working closely with our customers to strengthen our established supply chain position and extend key strategic supply agreements. We remain a critical solutions provider to customers and are developing stronger relationships as we work together to navigate the current environment. We remain confident that a recovery in demand conditions across our key end-use markets will begin to take shape in our third quarter of fiscal year 2021.”

“Our liquidity position is strong as a result of the actions we have taken since the onset of the pandemic and we will continue to maintain a disciplined approach to reducing costs and increasing cash generation. While we continue to actively manage our business given the current challenges, we are also maintaining a focus on the future and further advancing our position in critical emerging technologies. We recently launched our Carpenter Electrification brand and see a number of attractive growth opportunities for our proprietary soft magnetics solutions across all of our key end-use markets. We believe our soft magnetics and additive manufacturing solutions are pivotal to addressing the future of our industry and best positioning Carpenter Technology for sustainable growth over the long-term.”

For earnings history and earnings-related data on Carpenter Technology (CRS) click here.

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