4/1/2015 1:56:00 PM
NEWS BRIEFS
Carpenter Technology Cutting 10% of Workforce
Hurt by ongoing “weakness” in the oil and gas market, Carpenter Technology announced restructuring actions to “reduce fixed overhead costs and position the company to drive long-term, profitable growth.”
The actions, which include eliminating 200 salaried jobs (10% of its workforce) and an additional 60 outsourced positions, are expected to yield approximately $30 million of annual fixed overhead cost savings.
“We are clearly disappointed with our performance over the last several quarters and are taking decisive actions to return to the level of operational and financial performance we are capable of achieving, and which we and our shareholders expect and deserve,” stated CEO Gregory Pratt.
Other actions to boost company performance in recent months include spending $50 million to repurchase 1.2 million additional shares, targeting a $50 million inventory reduction by the end of fiscal 2015, and trimming capital spending to $100-$120 million for fiscal 2016.
While lowering its overall fiscal third quarter outlook, Carpenter Technology made clear that its fastener supply operation remains strong.
“Aerospace market revenue is expected to grow year over year in the quarter due to increased engine and fastener activity,” the company stated.
In January Carpenter Technology reported revenue for the second fiscal quarter of 2015 grew 9% to $548.4 million, while operating income slipped 5.3% to $45 million and net income dropped 18% to $24.1 million.
Aerospace and Defense segment sales, including fastener materials (titanium and nickel), rose 6% to $189.2 million during the quarter.
Carpenter Technology manufactures and distributes heading wire/rod and bar products in specialty alloys, including stainless steels, titanium alloys, superalloys, and various engineered products.
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