Carpenter Technology Corporation has announced financial results for the quarter ended March 31, 2016, in which the company reported a net loss of $23.9 million. Net sales for the third quarter of fiscal year 2016 were $456.3 million. Net sales excluding surcharge were $402.4 million, a decrease of $60.5 million (or 13%) from the same quarter last year, on 11% lower volume.
The operating loss was $24.3 million, a decrease of $29.1 million from the third quarter of the prior year. The operating loss included $54.7 million in primarily non-cash impairment charges related to certain assets in the company’s oil and gas businesses within the Performance Engineered Products (PEP) segment as well as other special items.
Operating income, excluding pension earnings, interest and deferrals (EID) and special items, was $35.2 million, compared to $35.1 million in the prior year period. These results primarily reflect lower volume, offset by an improved product mix and lower operating costs compared to the same period one year ago, the company stated.
During the quarter, the company experienced growth as expected across the Aerospace & Defence, Medical and Industrial & Consumer end-use markets on a sequential basis. The Energy end-use market was also higher driven by strong performance in the Power Generation sub-segment, while the Oil and Gas sub-segment was down significantly on a sequential basis.
“Despite challenging conditions, we continue to believe the Energy end-use market is strategically important given our strong customer relationships and the value our material solutions bring to demanding applications that require high strength and corrosion resistant products,” stated Tony Thene, Carpenter’s President and Chief Executive Officer.
Free cash flow in the third quarter of fiscal year 2016 was $47 million, compared to $87 million in the same quarter last year. Capital expenditures in the third quarter of fiscal year 2016 were $16.6 million, compared to $24.8 million in the prior year’s third quarter.
For the full year, Carpenter continues to expect inventory to decline in the fourth quarter and finish largely in-line with year-end fiscal 2015 levels. The Company now expects capital expenditures to be approximately $85 million to $95 million for fiscal year 2016, versus prior guidance of $100 million.