Carpenter Technology (CRS) Q2 2025 earnings summary

Executive summary

• Achieved record Q2 and first-half FY25 profitability, with Q2 operating income up 70% year-over-year to $118.9M and EPS of $1.66, nearly double the prior year, driven by strong execution, improved productivity, product mix, and pricing actions.

• Adjusted free cash flow reached $38.6M for Q2 and $51.9M for the six months, supporting capital allocation priorities and share repurchases.

• Raised full-year FY25 operating income guidance to $500M–$520M, reflecting ongoing confidence in robust earnings growth and strong market demand.

• Demand remains strong across aerospace, defense, and medical markets, with a $1.9B backlog and robust market positioning.

• Net income for Q2 was $84.1M, up from $42.7M year-over-year; six-month net income was $168.9M.

Financial highlights

• Q2 FY25 net sales were $676.9M, up 8% year-over-year, with gross profit rising to $177.5M and gross margin at 26.2%.

• Q2 operating income reached $119M, up 70% year-over-year; adjusted operating margin (excluding surcharge) was 21.7%.

• Adjusted EPS for Q2 FY25 was $1.66, up from $0.85 in Q2 FY24.

• Ended Q2 with $511M in liquidity, including $162.1M in cash and $348.9M in available credit.

• Net income for Q2 was $84.1M, nearly doubling from $42.7M in Q2 FY24.

Outlook and guidance

• FY25 operating income guidance raised to $500M–$520M, up from $460M–$500M, with continued confidence in future earnings growth beyond FY25.

• Q3 FY25 operating income expected between $126M and $134M; SAO segment Q3 projected at $140M–$145M, PEP at $10M–$12M.

• Projected adjusted free cash flow for FY25 is $250M–$300M, with an 85% conversion rate.

• Effective tax rate expected to normalize at 23% for the remainder of FY25.

• Anticipates continued growth beyond FY25, driven by strong market demand and productivity initiatives.