We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Why Is Carpenter (CRS) Up 30.1% Since Last Earnings Report?
Read MoreHide Full Article
A month has gone by since the last earnings report for Carpenter Technology (CRS - Free Report) . Shares have added about 30.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Carpenter due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Carpenter Technology reported an adjusted loss per share of 58 cents in second-quarter fiscal 2022, narrower than the Zacks Consensus Estimate of a loss of 63 cents. The company had reported an adjusted loss per share of 61 cents in the year-ago period.
Including one-time items, the company posted a loss per share of 61 cents compared with the year-ago quarter’s loss of $1.76 per share.
Net sales increased 13% year over year to $396 million in the reported quarter. The figure surpassed the Zacks Consensus Estimate of $353 million.
The company witnessed a year-over-year revenue decline of 9.7% in the Aerospace and Defense end-use market. Revenues in the Energy end-market were down 9.6% year on year. Revenues in the Medical end-use markets increased 39% year over year. Revenues in the distribution and industrial end-use markets climbed 34% and 18%, year over year, respectively. Transportation end-use market sales also increased 10.4% year over year.
Operational Results
The cost of goods sold in second-quarter fiscal 2022 moved up 12% year over year to $383 million. Gross profit came in at $13.1 million compared with the year-ago quarter’s $6 million. The adjusted operating loss in the reported quarter was $29.8 million compared with the prior-year quarter’s $32.3 million.
Segment Performance
The Specialty Alloys Operations (SAO) segment reported sales of $330.8 million compared with the prior-year quarter’s $300.4 million. The segment sold 43,248 pounds compared with the year-ago quarter’s 38,602 pounds. It posted an operating loss of $20.3 million compared with $11.6 million in the prior-year quarter.
The Performance Engineered Products’ (PEP) net sales increased 56.4% year over year to $86 million during the fiscal second quarter. The segment sold 2,776 pounds, up 81% from the year-ago quarter’s figure. The segment reported an operating profit of $3 million against the prior-year quarter’s operating loss of $7.2 million.
Financials
Carpenter Technology ended the fiscal second quarter with cash and cash equivalents of $97 million compared with $287 million at the end of fiscal 2021. The long-term debt was $695 million at the end of second-quarter fiscal 2022, in line with the fiscal 2021 end’s figure. Cash utilized in operating activities was $136 million in the six months ended as of Dec 31, 2021, against the cash inflow of $172 million in the prior-year period.
Free cash outflow in the reported quarter was $116 million against the cash inflow of $51 million in the year-ago quarter.
Carpenter Technology expects to benefit from the increasing demand trends across its end-use markets and strong customer relationships. Repairing is progressing well at its Reading press, which was impacted by a mechanical failure and led to an unplanned outage. The company expects the press to be operational in the fiscal third quarter.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -55% due to these changes.
VGM Scores
At this time, Carpenter has a poor Growth Score of F, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Carpenter has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Why Is Carpenter (CRS) Up 30.1% Since Last Earnings Report?
A month has gone by since the last earnings report for Carpenter Technology (CRS - Free Report) . Shares have added about 30.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Carpenter due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Carpenter Technology's Q2 Earnings & Sales Beat Estimates
Carpenter Technology reported an adjusted loss per share of 58 cents in second-quarter fiscal 2022, narrower than the Zacks Consensus Estimate of a loss of 63 cents. The company had reported an adjusted loss per share of 61 cents in the year-ago period.
Including one-time items, the company posted a loss per share of 61 cents compared with the year-ago quarter’s loss of $1.76 per share.
Net sales increased 13% year over year to $396 million in the reported quarter. The figure surpassed the Zacks Consensus Estimate of $353 million.
The company witnessed a year-over-year revenue decline of 9.7% in the Aerospace and Defense end-use market. Revenues in the Energy end-market were down 9.6% year on year. Revenues in the Medical end-use markets increased 39% year over year. Revenues in the distribution and industrial end-use markets climbed 34% and 18%, year over year, respectively. Transportation end-use market sales also increased 10.4% year over year.
Operational Results
The cost of goods sold in second-quarter fiscal 2022 moved up 12% year over year to $383 million. Gross profit came in at $13.1 million compared with the year-ago quarter’s $6 million. The adjusted operating loss in the reported quarter was $29.8 million compared with the prior-year quarter’s $32.3 million.
Segment Performance
The Specialty Alloys Operations (SAO) segment reported sales of $330.8 million compared with the prior-year quarter’s $300.4 million. The segment sold 43,248 pounds compared with the year-ago quarter’s 38,602 pounds. It posted an operating loss of $20.3 million compared with $11.6 million in the prior-year quarter.
The Performance Engineered Products’ (PEP) net sales increased 56.4% year over year to $86 million during the fiscal second quarter. The segment sold 2,776 pounds, up 81% from the year-ago quarter’s figure. The segment reported an operating profit of $3 million against the prior-year quarter’s operating loss of $7.2 million.
Financials
Carpenter Technology ended the fiscal second quarter with cash and cash equivalents of $97 million compared with $287 million at the end of fiscal 2021. The long-term debt was $695 million at the end of second-quarter fiscal 2022, in line with the fiscal 2021 end’s figure. Cash utilized in operating activities was $136 million in the six months ended as of Dec 31, 2021, against the cash inflow of $172 million in the prior-year period.
Free cash outflow in the reported quarter was $116 million against the cash inflow of $51 million in the year-ago quarter.
Carpenter Technology expects to benefit from the increasing demand trends across its end-use markets and strong customer relationships. Repairing is progressing well at its Reading press, which was impacted by a mechanical failure and led to an unplanned outage. The company expects the press to be operational in the fiscal third quarter.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -55% due to these changes.
VGM Scores
At this time, Carpenter has a poor Growth Score of F, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Carpenter has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.