Published on 8 Jul 2022 on Zacks via Yahoo Finance
Carpenter Technology (CRS) to Hike Base Prices on New Orders
Carpenter Technology Corporation CRS recently announced that it would increase base prices on new, non-contract orders across most of its premium products by 12-15%. The price rise will be effective with new orders placed after Jul 5. All other applicable surcharges will remain intact.Carpenter Technology is gaining from improved end-market demand, supported by record booking and strong backlog growth in third-quarter fiscal 2022. Management anticipates this momentum will continue through fiscal 2022. The industrial and consumer market is expected to witness consistent strong demand for consumer electronics, IoT and semiconductor applications for its ultra-high-purity materials. In the transportation end-use market, demand in the light-duty submarket remains strong on increased customer spending.The company has been witnessing broad-based demand recovery in the aerospace and defense and medical end-use market, which will continue in calendar 2022. Aerospace is gaining from strong lead times coupled with several contract wins. In defense, the company is benefiting from increased investments to develop next-gen programs and platforms. The ongoing recovery in elective surgeries from the Omicron variant is driving the medical end-use market. Medical procedures are expected to rise to pre-pandemic levels in the second half of the calendar year 2022. The company expects these trends will continue in the upcoming quarters.Carpenter Technology’s financial position is strong, which gives it the flexibility to strengthen its long-term growth profile by investing in emerging technologies like additive manufacturing and soft magnetics. As electric vehicle demand continues to grow and program activity increases for electrifying short-range air travel, the company is increasing investments in motor technology and soft magnetic solutions.The company has been implementing cost-reduction initiatives and portfolio realignments that are anticipated to drive significant cost savings. It expects to spend nearly $90 million in capital expenditures for fiscal 2022 and prioritize capital investments to target the existing and future growth markets.Carpenter Technology is witnessing delays in some projects due to outside contractors’ availability and extended lead times for certain materials. Moreover, supply chains continue to see challenges, mainly around longer-than-anticipated lead times and ongoing logistics disruptions. These factors will likely impact the company’s ability to meet production targets.
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