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- **Record Performance**: Q1 FY26 operating income of $153 million, up 31% YoY, with SAO margin hitting 32%, the highest in company history.
- **Aerospace Surge**: Aerospace bookings rose 23% sequentially, driven by 5 LTAs with price increases and Boeing's MAX rate hike to 42/month.
- **Cash Generation**: $39.2 million in cash flow, with FY26 free cash flow guidance of $240-280 million, supporting $400 million buyback program.
- **Expansion Momentum**: Brownfield project on track for late FY27 completion, with FY26 capital spend of $175-185 million.

**【CEO Summary Section】**
- **Record Earnings**: Q1 FY26 operating income of $153 million, up 31% YoY, driven by productivity, product mix, and pricing. SAO segment operating income reached $170.7 million, a 27% YoY increase.
- **Expanded Margins**: SAO adjusted operating margin of 32%, up from 26.3% YoY and 30.5% QoQ, reflecting strong execution and market position.
- **Strengthening Demand**: Aerospace and Defense bookings rose 23% sequentially, with 5 LTAs signed with aerospace customers featuring significant price increases.
- **Pricing Power**: Pricing actions contributed to a 10% YoY increase in sales per pound for aerospace products, despite sequential volume declines due to planned maintenance.

**【CFO Financial Commentary】**
- **Financial Highlights**: Adjusted operating income of $153 million, up 31% YoY. SAO segment margin of 32%, highest in company history. PEP segment operating income of $9.4 million, up 29% YoY.
- **Cash Flow**: Generated $39.2 million in cash from operations, with $42.6 million in capital expenditures. FY26 free cash flow expected between $240 million to $280 million.
- **Capital Allocation**: $49.1 million spent on share buybacks, with $151 million repurchased year-to-date. Brownfield expansion project progressing on schedule, with FY26 capital spend of $175-185 million.

**【Q&A Highlights】**
- **Aerospace Lead Times**: Engine alloy lead times remain extended, with customers accelerating orders post-Boeing MAX rate increase to 42/month.
- **LTA Duration**: 5 new LTAs signed with durations of 2-5 years, reflecting long-term supply-demand imbalance.
- **Defense Growth**: Defense orders up significantly, driven by new programs and FY26 budget expectations. Space business, though small, is growing strategically.
- **Project Timeline**: Brownfield expansion expected to complete late FY27 to early FY28, supporting SAO capacity for high-value materials.

Carpenter Technology Corporation (CRS) Q1 2026 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

CRS

CRS fundamentals

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