Carpenter Tech | 8-K: FY2026 Revenue Misses Estimate at USD 851 M

Revenue: As of FY2026, the actual value is USD 851 M, missing the estimate of USD 3.134 B.

EPS: As of FY2026, the actual value is USD 3.23, missing the estimate of USD 10.447.

EBIT: As of FY2026, the actual value is USD 206.9 M.

Overall Financial Performance (Fourth Quarter Fiscal Year 2026)

• Operating income for Carpenter Technology Corporation was $207 million, marking an 11% increase over Q3 FY26 and a 37% increase over Q4 FY25.
• The company achieved an adjusted operating margin ex. surcharge revenue of 30.4%.
• Gross profit totaled $268.9 million.
• Selling, general and administrative expenses were $62.0 million.
• The effective tax rate stood at 20.7%.
• Net income reached $162.4 million.
• Adjusted free cash flow was $155.0 million in Q4 FY26.

Segment Performance (Fourth Quarter Fiscal Year 2026)

Specialty Alloys Operations (SAO)

• Net sales ex. surcharge revenue for SAO increased 4% sequentially to $607.4 million, driven by the Aerospace and Defense and Industrial and Consumer end-use markets.
• SAO’s operating income reached a record $229.7 million, up 10% sequentially and 38% year-over-year.
• The adjusted operating margin ex. surcharge revenue for SAO achieved a record 37.8%, marking its eighteenth consecutive quarter of margin expansion.

Performance Engineered Products (PEP)

• Net sales ex. surcharge revenue for PEP increased 8% sequentially to $98.2 million, reflecting increased sales across all end-use markets except Energy.
• PEP’s operating income was $7.1 million, remaining flat sequentially.
• The adjusted operating margin ex. surcharge revenue for PEP stood at 7.2%.

Cash Flow and Liquidity (Fiscal Year 2026 and Q4 FY26)

• Carpenter Technology Corporation generated $605.0 million in cash from operating activities for fiscal year 2026.
• Adjusted free cash flow for FY26 totaled $362.3 million, including investments in brownfield expansion.
• Capital expenditures for FY26 amounted to $242.7 million.
• Total liquidity at the end of Q4 FY26 remained healthy at $892.4 million, comprising $393.3 million in cash and $499.1 million in available borrowings under the Credit Facility.
• The net debt/EBITDA ratio stood at -0.3x, with no near-term debt maturities.

Shareholder Returns

• Carpenter Technology Corporation executed $45.2 million in share repurchases in Q4 FY26, bringing the total to $281.0 million against a $400.0 million authorization.
• Annual dividends paid in FY26 amounted to $40.3 million.

Outlook and Guidance

Carpenter Technology Corporation expects Q1 FY27 SAO operating income to be between $218 million and $222 million, and PEP operating income to be $6 million to $7 million. For the full fiscal year 2027, the company anticipates operating income of $850 million to $880 million, representing a 21% to 25% increase over FY26, and expects to generate $400 million to $430 million in adjusted free cash flow. The company targets FY29 operating income of $1,200 million to $1,300 million, reflecting a strong 3-year earnings compound annual growth rate of 20% to 23%, with market dynamics projected to strengthen beyond FY29.