Carpenter Prioritizes Profit, Reduces Alloy Sales

Carpenter Technology

Carpenter Technology sold fewer alloys in its fiscal second quarter, focusing on higher-profit aerospace markets. This strategic shift led to nearly doubled profits despite reduced sales volumes.

Profit-Driven Sales Strategy Impacts Volumes

Alloy sales across all segments reached 46.2mn lb, down from 49.1mn lb year-on-year. The specialty alloys segment saw a 5.4mn lb decline, totaling 44.7mn lb. However, profits nearly doubled to $84.1mn. This reflects the company's focus on high-margin aerospace and medical products over lower-margin transportation and industrial products. CEO Tony Thene emphasized, "I am not trying to maximize tons. I'm trying to maximize profit." Aerospace sales rose to $334mn from $247mn, while other end-market sales declined.

Future Profit Growth and Capacity Utilization

Furthermore, Carpenter forecasts profits of $126mn-134mn for the fiscal third quarter, a 77pc year-on-year increase. This growth is expected from the performance engineered products segment, including Dynamet titanium, additives, Latrobe, and Mexican distribution. Carpenter plans to maintain 100pc capacity utilization, citing Boeing and Airbus build rate expectations. The company anticipates increased volumes over the next two years, driven by sustained aerospace demand.