9/25/2014 2:19:00 AM
NEWS BRIEFS
Carpenter Technology Warns Of Weak Results
Carpenter Technology Corp. said cost, output, and mix issues at its Specialty Alloys Operations (SAO) locations in Reading and Latrobe, Pa. will negatively impact the company’s first quarter earnings for fiscal year 2015.
“In July and August, the Reading mill experienced unanticipated startup issues after scheduled summer shutdowns,” the Wyomissing, PA, company stated. “In addition, earlier this month, the Latrobe location had an unplanned outage due to a cracked dome on its primary press. As a result, SAO experienced higher labor costs, increased maintenance/supply expenses and reduced output levels.”
The company said that while its Athens, AL, facility continues to increase the number of customer approvals, it was only able to offset a limited portion of the lost Reading and Latrobe output.
“As a result, while customer demand remains high, SAO will sell less premium product in the quarter than anticipated, which will negatively impact overall segment mix.”
CEO William Wulfsohn stated: “While we expected this to be a challenging quarter, it has been more difficult than anticipated. Given SAO’s difficulties, Carpenter as a company had breakeven performance in July and August, which was well below our expectations. Thus far in September, we are seeing clear signs that SAO is back on track as sales volume, mix, and production costs show strong signs of improvement.”
Wulfsohn added that Reading production is now at targeted levels and the Latrobe press is expected to be back online early in October.
As of the end of August, SAO’s overall backlog was 31% higher than on January 1 and up 8% since the start of our fiscal year on July 1. In addition, the backlog for premium forged bar and billet product line was up approximately 32% in 2014. Mill orders with Q2 FY15 ship dates have “significantly higher profit per pound than orders expected to be shipped in Q1, due to a higher concentration of aerospace, defense, and energy products.”
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