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Carpenter Technology Provides Update on Expected Second Quarter Results
01/16/2013 - Carpenter Technology continued to see strong demand for its premium and ultra-premium products sold into the aerospace and energy markets during the quarter ended 31 December 2012, but saw weaker demand in lower value product lines, which were impacted by current economic uncertainty.
Carpenter Technology Corporation expects net sales, excluding surcharge, of US$431 million for its second fiscal quarter ended 31 December 2012. This compares to $441 million reported in the first fiscal quarter of 2013, and is 30% higher than the second quarter of fiscal year 2012. Carpenter continued to see strong demand for its Premium and Ultra-Premium products sold into the aerospace and energy markets, but saw weaker demand in lower value product lines, which were impacted by current economic uncertainty.
Carpenter now expects second quarter earnings per diluted share to be approximately $0.61 to $0.62, which is about 20% higher than the prior fiscal second quarter, but below the $0.74 per diluted share reported in the first quarter of fiscal year 2013. The earnings increase versus Q2 2012 was driven primarily by the acquisition of Latrobe, which is delivering higher than expected synergies, and improved overall pricing/mix actions. The sequential reduction in earnings versus Q1 2013 is due to weaker Performance Engineered Products (PEP) segment performance, softer demand for lower value mill products, and the impact of production balancing within Specialty Alloys Operations (SAO).
“We continue to see strong end-market demand for our premium and ultra-premium products where we remain capacity constrained, and are delivering above target near-term Latrobe synergies,” said William A. Wulfsohn, president and CEO. “We also see uncertainty in demand for lower value mill products and are performing below plan in the PEP business segment. Therefore, we currently expect full year operating income improvement of 20 to 30 percent versus our last fiscal year. We are confident in the strategic actions we are taking, and remain on track to deliver our mid-decade earnings target.”
The fiscal year 2013 earnings target excludes the anticipated financial impact from selling the Latrobe distribution business, and one-time costs associated with the inventory reduction initiative and footprint optimization actions that will be outlined in further detail during the upcoming investor call.
Carpenter Technology Corp. produces and distributes premium alloys, including special alloys, titanium alloys and powder metals, as well as stainless steels, and alloy and tool steels.
