1/31/2014 2:19:00 AM
NEWS BRIEFS
Carpenter Technology Sales Drop Despite Volume Increases
Carpenter Technology Corp. reported sales fell 5.6% to $503.5 million in the second quarter of fiscal 2014 on 8% higher shipments.
“This sales decline can be attributed primarily to the continued soft demand in Aerospace and Energy,” the company stated. “Volume was up due to increased share on key platforms in Transportation and Industrial & Consumer.”
Fiscal Q2 operating income dropped 9.8% to $47.5 million and net income declining 10.6% to $29.5 million.
“Share gains were realized in Transportation and Industrial & Consumer, which helped offset continued soft demand in our Aerospace business,” stated CEO William A. Wulfsohn. “Operationally, in our Specialty Alloys Operations (SAO) segment we continued to lower our production cost per ton.”
Capital spending in the second quarter, largely related to the construction of the Athens facility, was $97.6 million, compared to $80.5 million in the prior year’s second quarter. Approximately 80% of the project spend has occurred; the remaining 20% will occur over the next 18 months.
Now 80% complete, the Athens facility has 27,000 tons of capacity.
END MARKETS
Aerospace and Defense – Sales fell 9% to $177.7 million. Structural and fastener material sales were down, due largely to destocking in the supply chain, while order patterns indicate growth in the second half of fiscal year 2014. In 2013, Boeing delivered 648 planes and Airbus delivered 626 planes, an increase of 9% and 6%, respectively, over 2012.
Energy – Sales slipped 6% to $64.8 million. Demand for oil and gas materials has stabilized and is expected to grow in the second half of fiscal year 2014. The power generation market is gaining momentum; Carpenter’s sales to this market segment in the second quarter increased versus the prior year.
Medical – Sales dropped 7% to $22.4 million. Volume is improving, but industry cost containment efforts continue to impact sales growth. Titanium prices remain low, which negatively impacts demand as distributors continue destocking.
Transportation – Sales rose 17% to $28.4 million. There has been strong build growth in North America—up 5% in calendar year 2013. Carpenter continues to benefit from strong demand growth for materials used in the newest engine platform fuel delivery systems, which are designed to meet CAFE standards.
Industrial and Consumer – Sales gained 4% to $88.9 million. There has been strong demand for materials used in bridge infrastructure projects. Demand is also strengthening for materials used in plant and equipment applications.
Carpenter Technology manufactures and distributes heading wire/rod and bar products in specialty alloys, including stainless steels, titanium alloys, superalloys, and various engineered products. ©2014 GlobalFastenerNews.com
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