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Investing.com -- Carpenter Technology Corporation (NYSE:CRS) shares fell 8.8% after the specialty materials manufacturer reported fourth-quarter revenue that fell short of analyst expectations, despite posting better-than-expected earnings.
The company reported fourth-quarter earnings per share of $2.21, exceeding the analyst estimate of $2.06. However, revenue came in at $755.6 million, missing the consensus estimate of $790.79 million and declining 5% compared to $798.7 million in the same quarter last year. The revenue shortfall occurred despite a 4% sequential increase in net sales excluding surcharge, driven by increased sales in Aerospace and Defense and Energy end-use markets.
Carpenter Technology’s shares dropped sharply following the results, as investors focused on the revenue miss despite the company achieving record quarterly adjusted operating income of $151.4 million, up 21% YoY.
"We delivered another record quarter in the fourth quarter of fiscal year 2025, generating $151.4 million of operating income," said Tony R. Thene, President and CEO of Carpenter Technology. "This completes the most profitable year in Carpenter Technology’s history, achieving $525.4 million in adjusted operating income in fiscal year 2025."
The company’s Specialty Alloys Operations segment performed strongly with operating income of $167.0 million, up 10% sequentially and 19% YoY, while expanding its adjusted operating margin to 30.5%.
Looking ahead, Carpenter Technology expects fiscal year 2026 operating income to be in the range of $660 million to $700 million, representing a 26% to 33% increase over fiscal year 2025. For the first quarter of fiscal year 2026, the company anticipates operating income between $148 million and $152 million.
The company also generated $258.0 million of cash from operating activities in the quarter and repurchased $24.1 million in shares as part of its $400 million share repurchase program.
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