Q4 2026 Carpenter Technology Corp Earnings Call Transcript
Key Points
- Carpenter Technology Corp (CRS) delivered another record quarter with operating income of $206.9 million, up 11% sequentially and 37% year-over-year.
- The SAO segment achieved a record adjusted operating margin of 37.8%, marking the 18th consecutive quarter of margin expansion.
- The company generated strong cash flow, with $240.1 million from operations and $155 million in adjusted free cash flow in Q4.
- Management provided a robust FY2027 outlook, expecting operating income between $850 million and $880 million, representing 21% to 25% growth.
- The long-term FY2029 operating income target of approximately $1.2 billion to $1.3 billion implies a 20%+ CAGR, supported by the brownfield expansion project.
- The company experienced the sudden passing of its newly appointed CEO, Brian Malloy, creating a leadership transition.
- Sales in the energy end-use market declined 22% sequentially and 12% year-over-year due to order timing and production scheduling.
- The average base price per pound in the SAO segment decreased due to a higher proportion of lower-priced products in the sales mix.
- Some structural aerospace customers remain cautious in their ordering patterns, ordering below expected demand rates.
- The PEP segment's operating income is expected to be relatively low, between $6 million and $7 million in the upcoming quarter.
Hello everyone and thank you for joining us and welcome to the Carpenter Technology course Q4 FY26 earnings presentation. After today's prepared remarks, we will host a question-and-answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to John Hewitt, Vice President, Investor Relations. Please go ahead.
Thank you, operator. Good morning, everyone, and welcome to the Carpenter Technology earnings conference call for the fiscal 2026 fourth quarter ended June 30, 2026.
This call is also being broadcast over the Internet along with presentation slides.
For those of you listening by phone, you may experience a time delay in slide movement.
Speakers on the call today are Tony Tain, Chairman, President and Chief Executive Officer and Tim Lane, Senior Vice President and Chief Financial Officer.
Statements made by management during
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