Carpenter Technology (CRS) Q2 2026 earnings summary

Executive summary

• Achieved record quarterly operating income of $155.2 million, up 31% year-over-year for Q2 FY2026, driven by strong execution, market position, and unique capabilities.

• Net income for Q2 FY2026 was $105.3 million ($2.09 per diluted share), with adjusted EPS of $2.33, excluding debt extinguishment losses.

• Strong demand in Aerospace & Defense, with commercial aerospace bookings up 23% sequentially and robust pricing environment.

• Completed several long-term agreements with aerospace customers at significant price increases.

Financial highlights

• Net sales for Q2 FY2026 were $728.0 million, up 8% year-over-year; gross profit reached $218.3 million, up 23% year-over-year.

• Adjusted operating margin (excluding surcharge revenue and special items) was 26.3% for Q2 FY2026, up from 21.7% a year ago.

• Cash from operating activities was $132.2 million, nearly doubling from $67.9 million a year ago.

• Adjusted free cash flow for the quarter was $85.9 million, up from $38.6 million year-over-year.

• Effective tax rate for Q2 FY2026 was 19.0%.

Outlook and guidance

• Fiscal 2026 operating income guidance raised to $680 million–$700 million, a 30%–33% increase over record fiscal 2025.

• Adjusted free cash flow for FY2026 projected at least $280 million.

• Q3 FY2026 operating income expected at $177 million–$182 million, with SAO at $195 million–$200 million and PEP at ~$7 million.

• Fiscal 2027 guidance of $765 million–$800 million expected to be updated in coming quarters; further earnings growth anticipated beyond FY2027.

• Capital expenditures for FY2026 projected at $300 million–$315 million, including brownfield expansion.