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Carpenter Technology (CRS) Reports Loss in Q4, Shares Down

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Carpenter Technology Corporation’s (CRS - Free Report) share prices have declined 4.4% since the company reported adjusted loss per share of 28 cents for fourth-quarter fiscal 2021 (ended Jun 30, 2021). The figure is, however, narrower than the Zacks Consensus Estimate of loss per share of 51 cents. The company had reported adjusted loss per share of 16 cents in the year-ago period.

Including one-time items, the company posted a loss per share of $1.18 compared with the year-ago quarter’s $2.46.

Net sales declined 3.6% year over year to $422 million in the reported quarter. The figure, however, beat the Zacks Consensus Estimate of $371 million.

The company witnessed a year-over-year revenue decline of 22.6% in the Aerospace and Defense end-use market. Revenues in the Energy end-market slumped 51.6% year on year. Revenues in Medical end-use markets fell 9.2% year over year. Revenues in the distribution and industrial end-use markets climbed 41.7% and 20.6%, year over year, respectively. Transportation end-use market sales also surged 110.9% year over year.

Operational Results

Cost of goods sold in fourth-quarter fiscal 2021 was up 6.7% year over year to $441 million. The company incurred an adjusted gross loss of $21.3 million compared with the year-ago quarter’s $5.4 million. Adjusted operating loss in the reported quarter was $12.5 million compared with the prior-year quarter’s $8.9 million.

Segment Performance

The Specialty Alloys Operations (SAO) segment reported sales of $361.5 million, reflecting a year-over-year decline of 2.1%. The segment sold 47,712 pounds, 3.4% higher than the prior-year quarter. It posted an operating loss of $47.3 million against the operating profit of $5.3 million seen in the prior-year quarter.

The Performance Engineered Products’ (PEP) net sales inched up 0.5% year over year to $78 million during the fiscal fourth quarter. The segment sold 2,912 pounds, 22.1% higher than the year-ago quarter figure. The segment reported an operating loss of $2.3 million compared with the  $8.4 million seen in the prior-year quarter.

Financials

Carpenter Technology ended fiscal 2021 with cash and cash equivalents of $287 million compared with $193 million at end of fiscal 2020. Long-term debt was $694.5 million at the end of fiscal 2021 compared with $552 million as of fiscal 2020 end. Cash flow from operating activities was $250 million in fiscal 2021 compared with the prior fiscal year’s $232 million.

Free cash flow in fiscal 2021 was $132 million compared with $21.8 million in fiscal 2020.

Fiscal 2021 Performance

Carpenter Technology reported adjusted loss per share of $2.01 in fiscal 2021 as against the earnings per share of $2.36 in fiscal 2020. In fiscal 2021, net sales came in at $1.47 billion, down 32.3% from the prior fiscal year.

Outlook

The company expects to benefit from improving demand trends across its end markets. Carpenter Technology’s investment in additive manufacturing and electrification capabilities will strengthen the company’s growth prospects in the near term.

Price Performance

Carpenter Technology’s shares have gained 70.5% over the past year compared with the industry's appreciation of 86.2%.

Zacks Investment Research
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Zacks Rank & Other Stocks to Consider

Carpenter Technology currently carries a Zacks Rank #2 (Buy).

A few other top-ranked stocks in the basic materials space are Nucor Corporation (NUE - Free Report) , Cabot Corporation (CBT - Free Report) and Dow Inc. (DOW - Free Report) .

Nucor has a projected earnings growth rate of 455.4% for the current year. The company’s shares have soared 130.6% in a year’s time. It currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Cabot has an expected earnings growth rate of 137.5% for the current fiscal year. The company’s shares have surged 42.4% in the past year. It currently carries a Zacks Rank #2.

Dow has an expected earnings growth rate of 403.01% for the current year. The company’s shares have gained 45.4% in the past year. It currently carries a Zacks Rank #2.