NEW YORK Carpenter
Technology Corp. expects operating earnings to grow by 30
percent, or $70 million, in fiscal 2013, excluding pension
expenses and costs related to the acquisition of Latrobe
Specialty Metals Inc., as the companys end markets remain
"Weve expanded long-term
agreements and implemented pricing mechanisms and hedging
policies to offset lower nickel prices," president and chief
executive officer William Wulfsohn said during the
companys earnings conference call Tuesday. He added that
demand for the companys high-value products should hold
up well relative to more commoditized products like flat-rolled
Wyomissing, Pa.-based Carpenter
posted net income of $121.2 million for its fiscal year ended
June 30, up 70.7 percent from the previous year, on sales that
climbed 21.1 percent to nearly $2.03 billion.
Carpenter sold 235.5 million
pounds during the fiscal year, up 8.6 percent from 216.8
million pounds, with Latrobe adding 23 million pounds since the
$558-million acquisition was completed in February. "Weve
owned Latrobe for four months, and the results have been
strong," Wulfsohn said.
Capacity expansions at Latrobe
and at the companys Reading, Pa., facility will allow
Carpenter to ship an additional 4,000 tons of premium alloys in
fiscal 2013 and 2014 while it builds its $500-million premium
alloy facility in Alabama.
"Were quoting out into the
first calendar quarter of 2013," Wulfsohn said of lead times
for premium products.
Carpenter will spend about $350
million on capital projects in 2013, much of it going to the
new facility. "The (Alabama) project is on schedule and on
budget," Wulfsohn said.
Fiscal fourth-quarter aerospace
sales grew 49 percent to $293.9 million from the same period
last year on increasing build rates and historically high
titanium fastener demand.
Energy market growth in the
quarter was more tepid, growing 13 percent to $79.2 million,
with weakness in gas turbine shipments offsetting solid demand
from the offshore drilling market. "In the short term,
its a little bit weaker, but the fundamentals ... are
likely to drive a higher demand rate over time," Wulfsohn
Distributor shipments also were
softer, with industrial and consumer shipments in the fiscal
fourth quarter rising only 3 percent to $139 million. "A
limited area of weakness is around the small percentage of
business that we do through distributors," Wulfsohn said, but
he noted that the majority of Carpenters sales are to
long-term customers, negating opportunistic buying.