Company Reports Q2 Revenue of $728M, CEO States Operating Income at $155.2M
Reports Q2 revenue $728M, consensus $734.31M. "The second quarter of fiscal year 2026 generated $155.2 million of operating income," said Tony Thene, CEO "The record quarter was an increase of 31.0 percent over the previous second fiscal quarter.The quarterly performance was driven by the SAO segment, which continued to expand adjusted operating margins. Reaching 33.1 percent in the quarter, up from 28.3 percent in the second quarter a year ago, the SAO segment realized $174.6 million in operating income, its best quarter on record. Demand in our Aerospace and Defense end-use market continues to accelerate as customers gain confidence with the ramping build rates. Notably, we saw bookings for Commercial Aerospace increase 23 percent sequentially. Given the strong demand outlook, our customers continue to be focused on securing their supply. To that end, we completed negotiations on three additional long-term agreements with aerospace customers, realizing significant value. Given the strong demand environment and the visibility we have for the second half of the fiscal year, we are raising our guidance to $680 million to $700 million. This range represents a 30 percent to 33 percent increase over our record fiscal year 2025 earnings. In addition, we expect to generate at least $280 million in adjusted free cash flow in fiscal year 2026. With a strong balance sheet and meaningful adjusted free cash flow, we will continue to take a balanced approach to capital allocation: sustaining our current asset base to achieve our targets, investing in high value growth initiatives like the recently announced brownfield capacity expansion, and returning cash to shareholders. To that end, we executed $32.1 million in share repurchases in the quarter against our $400.0 million repurchase program. Looking over the long term, our broad portfolio of specialized solutions, increasing productivity, optimizing product mix and pricing actions will continue to drive growth well into the future. Together with our investments to accelerate growth, we are positioned to achieve and exceed our goals over the long-term."
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Carpenter Technology Reports Record Q2 Earnings Driven by Aerospace Demand
- Record Quarterly Earnings: Carpenter Technology reported a record operating income of $155 million for Q2, a 31% year-over-year increase, with SAO segment operating income reaching a record $174.6 million, highlighting significant profitability growth amid strong aerospace and defense demand.
- Strong Market Demand: Aerospace and defense bookings increased by 8% sequentially, with commercial aerospace bookings up 23%, indicating sustained demand in key markets that is expected to further drive revenue growth in the future.
- Cash Flow and Share Buybacks: The company generated $132.2 million in operating cash flow and $85.9 million in adjusted free cash flow, repurchasing $32.1 million in stock during the quarter, which enhanced liquidity to $730.8 million, providing ample funding for future investments.
- Upgraded Full-Year Guidance: Carpenter raised its fiscal 2026 operating income outlook to $680 million to $700 million, reflecting an optimistic view on future market demand, particularly in the aerospace sector, which is expected to continue its growth trajectory.
Carpenter Technology Reports Q2 2026 Earnings Results
- Earnings Beat: Carpenter Technology's Q2 non-GAAP EPS of $2.33 exceeded expectations by $0.11, indicating sustained profitability despite revenue falling short of forecasts.
- Revenue Growth: The company reported Q2 revenue of $728 million, a 7.5% year-over-year increase, yet missed market expectations by $6.31 million, highlighting challenges from intensified market competition and demand fluctuations.
- Guidance Upgrade: Carpenter raised its fiscal year 2026 operating income guidance to between $680 million and $700 million, representing a 30% to 33% increase over fiscal year 2025, reflecting confidence in future performance and a positive market outlook.
- Cash Flow Outlook Improvement: The adjusted free cash flow forecast is now at least $280 million, indicating enhanced capital management and cash generation capabilities, which will support future investments and shareholder returns.
