Losses continue for Carpenter Technology amid pandemic | Business News | wfmz.com – 69News WFMZ-TV

Losses continue for Carpenter Technology amid pandemic | Business News | wfmz.com – 69News WFMZ-TV

PHILADELPHIA — Results are decidedly mixed at Carpenter Technology, which has most of its manufacturing facilities in Berks County. The company is still operating at a loss in its first quarter of fiscal 2022. Compared to the previous fiscal year’s first quarter, the company showed growth in three of its five end-user markets, but sequentially, four out of the five end-user markets are down, compared to fourth-quarter fiscal 2021.

Aerospace and defense, the company’s largest market, showed declines since both last quarter and the year-ago quarter. The energy end-user market showed 21% growth since the last quarte, but it declined 24% compared to the first quarter of fiscal 2021.

In sum, sales, excluding raw material surcharges, were up 2% year-over-year but down 10% sequentially. The company said it believes that removing the gains from raw material surcharges from operating margins provides a more consistent basis for comparing results of operations from period to period.

To be fair, Carpenter was hit hard by the continuing effects of the pandemic. Within the specialty alloys operating segment, the company reported short-term operational delays, including COVID-19 isolations at key work centers, supply chain disruptions around the world, and hiring challenges in a difficult labor environment.

Running a cyclical manufacturing company like Carpenter requires patience and careful planning, completely unlike fast-paced, high flying technology companies.

The vast majority of employees can’t work from home. They must be in the factories producing. That increases COVID-19 costs, including outside services to execute enhanced cleaning protocols, additional personal protective equipment, isolation pay for production employees potentially exposed to COVID-19, and various operating supplies necessary to maintain the operations while keeping employees safe against possible exposure in the company’s facilities.

With all those problems, the market seemed to find Carpenter’s performance acceptable, and its stock was up over 4% in late-morning trading.

Management observations and 1Q results

“Demand patterns across our end-use markets continue to improve as our backlog finished up 25% sequentially and 49% year-over-year,” said Tony R. Thene, Carpenter’s president and CEO. “We continue to see signs of a broad-based recovery taking hold across the aerospace supply chain with an acceleration of demand conditions expected in calendar year 2022.”

Net sales for the first quarter of fiscal year 2022 were $387.6 million, compared with $353.3 million in the first quarter of fiscal year 2021, an increase of $34.3 million or 9.7%, on 2% lower volume. Net sales, excluding surcharge, were $312.9 million, an increase of $5.7 million from the same period a year ago.

The operating loss was $19.1 million, compared to the operating loss of $48.8 million in the prior year. …….

Source: https://www.wfmz.com/business/losses-continue-for-carpenter-technology-amid-pandemic/article_3c7024dc-380e-11ec-934e-f34c76431af0.html

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