Carpenter Technology Corporation (NYSE:CRS) has reported impressive results for the company’s fiscal year 2013 first quarter (Q1 ended September 30, 2012). Net sales for the quarter were $544.9 million, up some 32% from the previous year. Excluding surcharge revenue, net sales were $440.8 million, up 41% from a year ago on 36% higher volume. Net income was reported as $39.2 million for the quarter.
“Our strong first quarter results demonstrate that we are continuing to execute well against our strategic plan,” stated William A. Wulfsohn, President and Chief Executive Officer. “While there are some areas, particularly in lower value products, where customer demand has softened recently, our overall business continues to be well positioned in attractive end markets with strong demand for our ultra-premium and premium products. This is evident in our strong top line growth, and continuing positive spread between our revenue and volume growth rates.”
“We remain on track to achieve the financial targets we set for our full fiscal year and expect strong 2nd half shipment levels. Strong customer demand for the ultra-premium and premium parts of our product line, combined with our large backlog is consuming our full available premium capacity.”
Specialty Alloy Operations segment sales without surcharge increased 16% on 7% higher volume compared with the fiscal year 2012 first quarter. Most of this growth occurred in the highest value ultra-premium and premium products. Performance Engineered Products (PEP) segment sales increased 17% in the same period, essentially due to the inclusion of the Specialty Steel Supply (SSS) energy distribution business.
The company states that aerospace & defence market sales were $252.6 million in the first quarter, up 45% compared with the same period a year ago. Excluding surcharge revenue, aerospace & defence sales were up 52%. Aerospace growth continues to reflect strong demand for Carpenter’s and Latrobe’s premium and ultra-premium products.
Increased demand for engine materials is being driven by the higher build rate of larger engines and share gain. Demand for nickel and stainless fastener material increased year over year for the ninth consecutive quarter, while shipment of titanium fastener material set a new first quarter record following a record fourth quarter. Sales of Carpenter’s Custom-series stainless alloys and the addition of Latrobe’s structural, bearing and other complementary products also contributed to the year-to-year growth rate.
International sales in the first quarter were $163.8 million, an increase of 19% compared with the same quarter a year earlier – driven by a 41% increase in Asia/Pacific sales and a 14% increase in European sales. Growth in Asia/Pacific was led by sales into the aerospace and energy end markets. In particular, there is a significant increase in activity by Chinese aerospace forging customers and the Japanese aerospace supply chain.
Growth in Europe was led by increased demand for materials used for aerospace and high value automotive applications. Total international sales in the quarter represented 30% of total Company revenue compared with 33% in the prior year.