CRS

Carpenter Technology has executed one of the cleaner industrial turnarounds in the market. Revenue has climbed from $1.48B with a $230M loss in FY2021 to $2.88B with $376M of net income in FY2025, and the operating line has compounded violently — operating income up 61.5% to $521.8M and diluted EPS more than doubling to $7.42. Margins are now genuinely good for a metals producer: 18.1% operating, 13.1% net, and a 19.9% ROE. The balance sheet supports the story — liabilities/equity of 0.85x, $316M cash (up 58.5%), stable long-term debt of $695M, and operating cash flow of $440M funding both $154M of capex and $102M of buybacks. The MD&A confirms the quality engine: aerospace & defense is now 62% of sales ($1,768.6M, up from 51% two years ago), and the surcharge mechanism passes raw-material and tariff costs through to customers, structurally protecting net income from nickel/cobalt/titanium volatility (subject to a timing lag).

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