PHILADELPHIA, PA — Carpenter Technology Corporation (NYSE: CRS) delivered its most profitable quarter in company history, reporting record operating income and raising its fiscal 2025 guidance. For the third quarter ended March 31, 2025, the company achieved operating income of $137.8 million and earnings per diluted share of $1.88.
The company’s Specialty Alloys Operations (SAO) segment was a key driver of performance. SAO operating income reached $151.4 million, up 46% year-over-year, with an adjusted operating margin of 29.1%, marking the 13th consecutive quarter of margin expansion. Total net sales rose to $727.0 million, an increase of 6% over the prior-year period, propelled by higher value product mix and operational efficiencies despite a 7% decline in shipments.
“Notably, the SAO segment expanded their adjusted operating margin to 29.1 percent, up from 21.4 percent in the third quarter a year ago,” said Tony R. Thene, President and CEO. “Building on the record third quarter performance, we expect to carry our operating momentum into the fourth quarter. As a result, we are raising our guidance again for the full fiscal year 2025.”
Share Repurchases and Cash Flow
The company generated $74.2 million in cash from operating activities, including $34.0 million of adjusted free cash flow for the quarter. Carpenter Technology used its liquidity to repurchase $37.5 million worth of shares, contributing to a total of $77.8 million in buybacks year-to-date under its $400.0 million repurchase program.
Additionally, Carpenter Technology ended the quarter with $500.4 million in total liquidity, comprising $151.5 million in cash and $348.9 million in available credit facility borrowings.
Revised Fiscal 2025 Guidance
Given the strong Q3 performance, Carpenter Technology raised its fiscal 2025 operating income guidance to a projected range of $520 million to $527 million, representing a nearly 50% increase over fiscal 2024. The company also expects to generate $250 million to $300 million in adjusted free cash flow this fiscal year. Looking ahead, Carpenter projects operating income of $765 million to $800 million in fiscal 2027, driven by robust market fundamentals and a strategic brownfield expansion project slated to come online in fiscal 2028.
Outlook
Carpenter Technology’s results underscore its ability to overcome supply chain challenges while maintaining strong performance across high-value markets. With an expanding operating base, strategic investments, and shareholder-focused initiatives, the company is well-positioned to sustain its growth trajectory in the years ahead.
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