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Carpenter Technology (CRS) Rides on End-Market Demand, Cost Control
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On May 24, we issued an updated research report on Carpenter Technology Corporation (CRS - Free Report) . The company is poised to gain from solid demand across its key end-markets, focus on cost-reduction initiatives as well as investment in additive manufacturing and soft magnetics. However, COVID-19 mitigation costs and inventory reduction initiatives might impact its performance.
Carpenter Technology reported adjusted loss per share of 54 cents in third-quarter fiscal 2021. The figure came in narrower than the Zacks Consensus Estimate of loss per share of 58 cents. The company had reported adjusted earnings per share of 82 cents in the year-ago period. Revenues of $352 million plunged 66.2% year over year, missing the Zacks Consensus Estimate of $365 million.
Recovery in End-Market Demand to Aid Growth
The company anticipates to witness demand recovery across its key end-use markets with increased sales in fourth-quarter fiscal 2021. Carpenter Technology has completed several contract extensions in the medical, transportation and aerospace and defense end-use markets. The company’s industrial end-use market is likely to witness continued solid demand for fluid control and semiconductor applications for its ultra-high-purity materials. It is witnessing recovery in some areas of the Aerospace and Defense end-use market with strong defense submarket.
Apart from this, the company is gaining from improving demand in the medical end-use market on recovery in elective surgery volume as major population gets vaccinated. Also, large OEM, leading advanced materials portfolio and ability to develop new material solutions will fuel growth. In the transportation end-use market, demand in the light vehicle market is healthy, aided by North America and China. The heavy-duty truck market has recovered and is likely to grow through calendar-year 2022.
Investments & Acquisitions to Spur Growth
The company’s financial position is strong, which gives it the flexibility to strengthen its long-term growth profile by investing in emerging technologies like additive manufacturing and soft magnetics. In fact, the completion of the multi-year $100-million investments in the hot strip mill project will support the growing demand for soft magnetics material and expanding electrification initiatives across multiple markets. Also, the company has built its additive portfolio with the acquisitions of CalRam and Puris, and completed the construction of an emerging technology center in Athens, AL to capitalize on rapid additive manufacturing growth.
Cost-Control Actions to Boost Margin
Carpenter Technology has been implementing cost-reduction initiatives and portfolio realignments that are anticipated to aid in significant costs savings. The company is on track to spend about $110-$120 million in capital expenditures for fiscal 2021, and prioritizing capital investments to target the existing and future growth markets. It has also initiated actions to reduce the inventory level in a bid to align with customer demand. Moreover, the divesture of Amega West oil and gas business, and additional restructuring actions in the additive business unit will likely deliver annual savings.
However, there are few factors that might impede growth.
The company’s energy end market continues to be impacted by a challenging oil and gas sub-market with reduced drilling activity in North America. Carpenter Technology’s fiscal fourth-quarter performance will be adversely impacted by inventory-reduction initiatives and COVID-19 mitigation costs.
Price Performance
Carpenter Technology’s shares have gained 99.1% over the past year compared with the industry's rally of 102.8%.
Zacks Rank & Stocks to Consider
Carpenter Technology currently carries a Zacks Rank #3 (Hold).
ArcelorMittal has a projected earnings growth rate of 984.7% for the current fiscal year. The company’s shares have soared nearly 179% in the past year.
Celanese has an expected earnings growth rate of 68.3% for the current fiscal year. The company’s shares have rallied around 90% over the past year.
Dow has an estimated earnings growth rate of 261.6% for the current fiscal year. The company’s shares have gained roughly 75% in a year’s time.
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Carpenter Technology (CRS) Rides on End-Market Demand, Cost Control
On May 24, we issued an updated research report on Carpenter Technology Corporation (CRS - Free Report) . The company is poised to gain from solid demand across its key end-markets, focus on cost-reduction initiatives as well as investment in additive manufacturing and soft magnetics. However, COVID-19 mitigation costs and inventory reduction initiatives might impact its performance.
Carpenter Technology reported adjusted loss per share of 54 cents in third-quarter fiscal 2021. The figure came in narrower than the Zacks Consensus Estimate of loss per share of 58 cents. The company had reported adjusted earnings per share of 82 cents in the year-ago period. Revenues of $352 million plunged 66.2% year over year, missing the Zacks Consensus Estimate of $365 million.
Recovery in End-Market Demand to Aid Growth
The company anticipates to witness demand recovery across its key end-use markets with increased sales in fourth-quarter fiscal 2021. Carpenter Technology has completed several contract extensions in the medical, transportation and aerospace and defense end-use markets. The company’s industrial end-use market is likely to witness continued solid demand for fluid control and semiconductor applications for its ultra-high-purity materials. It is witnessing recovery in some areas of the Aerospace and Defense end-use market with strong defense submarket.
Apart from this, the company is gaining from improving demand in the medical end-use market on recovery in elective surgery volume as major population gets vaccinated. Also, large OEM, leading advanced materials portfolio and ability to develop new material solutions will fuel growth. In the transportation end-use market, demand in the light vehicle market is healthy, aided by North America and China. The heavy-duty truck market has recovered and is likely to grow through calendar-year 2022.
Investments & Acquisitions to Spur Growth
The company’s financial position is strong, which gives it the flexibility to strengthen its long-term growth profile by investing in emerging technologies like additive manufacturing and soft magnetics. In fact, the completion of the multi-year $100-million investments in the hot strip mill project will support the growing demand for soft magnetics material and expanding electrification initiatives across multiple markets. Also, the company has built its additive portfolio with the acquisitions of CalRam and Puris, and completed the construction of an emerging technology center in Athens, AL to capitalize on rapid additive manufacturing growth.
Cost-Control Actions to Boost Margin
Carpenter Technology has been implementing cost-reduction initiatives and portfolio realignments that are anticipated to aid in significant costs savings. The company is on track to spend about $110-$120 million in capital expenditures for fiscal 2021, and prioritizing capital investments to target the existing and future growth markets. It has also initiated actions to reduce the inventory level in a bid to align with customer demand. Moreover, the divesture of Amega West oil and gas business, and additional restructuring actions in the additive business unit will likely deliver annual savings.
However, there are few factors that might impede growth.
The company’s energy end market continues to be impacted by a challenging oil and gas sub-market with reduced drilling activity in North America. Carpenter Technology’s fiscal fourth-quarter performance will be adversely impacted by inventory-reduction initiatives and COVID-19 mitigation costs.
Price Performance
Carpenter Technology’s shares have gained 99.1% over the past year compared with the industry's rally of 102.8%.
Zacks Rank & Stocks to Consider
Carpenter Technology currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the basic materials space include ArcelorMittal (MT - Free Report) , Celanese Corp. (CE - Free Report) and Dow Inc. (DOW - Free Report) . All of these stocks flaunt a Zacks Rank #1 (Strong Buy) currently. You can see the complete list of today’s Zacks #1 Rank stocks here.
ArcelorMittal has a projected earnings growth rate of 984.7% for the current fiscal year. The company’s shares have soared nearly 179% in the past year.
Celanese has an expected earnings growth rate of 68.3% for the current fiscal year. The company’s shares have rallied around 90% over the past year.
Dow has an estimated earnings growth rate of 261.6% for the current fiscal year. The company’s shares have gained roughly 75% in a year’s time.
Bitcoin, Like the Internet Itself, Could Change Everything
Blockchain and cryptocurrency have sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.
Zacks has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly.
See 3 crypto-related stocks now >>