Carpenter Technology Corporation posted a loss in its first-quarter earnings results for fiscal year 2022, the company announced on Thursday.
However, Carpenter president and CEO Tony Thene sounded an optimistic note about the economic recovery expected to continue in calendar year 2022 and its impact on the Philadelphia-based company’s outlook.
“Notably, we saw demand improve via backlog growth in our key aerospace and defense and medical end-use markets, which together accounted for approximately 55% of our revenue this quarter,” Theme said during a call.
“A key indicator of improving market conditions is backlog growth, where we generated increases of 25% sequentially and 49% year-over-year.”
Still, Carpenter Technology reported a net loss of $14.8 million, or 31 cents per diluted share, for the first quarter ending on Sept. 30.
Sales were also down either sequentially, year-over-year or both for most of Carpenter’s end-use markets.
Despite accounting for the majority of the company’s revenue, aerospace and defense sales were down 18% from the previous quarter and 9% compared to last year, while its medical vertical saw a 3% drop in sales sequentially and 24% year-over-year.
Thene observed the decline in aerospace and defense was anticipated in last quarter’s call as certain customer agreements expired, and expects continued success as supply chains stabilize.
“It is growing,” Thene said of the vertical. “Our aerospace and defense backlog is up 25% sequentially and 17% year-over-year as customers anticipate ongoing improvement.”
Medical procedures are also expected to increase in many regions, Thene said, which will result in rising demand in Carpenter’s medical end-use market.
“Conditions across our end-use markets continue to largely improve and we are focused on capitalizing on today’s demand patterns,” Thene said.
“While the results for first quarter of fiscal year 2022 were impacted by the near-term operation challenges, we believe they are short-term in nature and wont impact our ability to serve our customers and drive growth over the long-term.”
Thene also touted the commissioning of the new hot strip mill on Carpenter’s Reading campus, which he said is already making the company more competitive.
“The mill significantly strengthens our soft magnetic capability and production capacity at a time when electrifying is increasingly disrupting our major end-use markets,” he said.
“The productivity, quality and consistency of our new hot strip mill is a competitive advantage for us which has already resulted in increased demand from customers.”
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