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Profitable CarTech mulls acquisitions

Keywords: Tags  Carpenter Technology, Cartech, earnings, aerospace sales, Latrobe Specialty Metals, William Wulfsohn, Daniel Fitzgerald

NEW YORK — Carpenter Technology Corp., which posted a 39.8-percent jump in earnings in its fiscal second quarter, is looking for acquisition opportunities.

"We are active in looking at opportunities in the (performance engineered products) area. In the ultra-premium area, there are a couple of areas of interest," president and chief executive officer William A. Wulfsohn said during a conference call. "Obviously it takes two to tango, but we have some ideas and we’re working on them."

The Wyomissing, Pa.-based company posted net income of $33 million for the three months ended Dec. 31, up from $23.6 million in the same period a year earlier, on sales that climbed 23.8 percent to $533.5 million. Excluding revenue from surcharges, net sales of $430.7 million were up 30 percent, which the company attributed primarily to the acquisition of Latrobe Specialty Metals Inc.

The Latrobe acquisition had delivered "double the expected synergies," Wulfsohn said during the conference call, while the company also received strong end-market demand for its premium and ultra-premium products.

"At the same time, we see weaker demand for lower-value mill product lines and destocking in the titanium medical supply chain," he said. "We currently expect a full-year operating income improvement of 20 to 30 percent vs. our last fiscal year, with strong fiscal second-half revenue and earnings. We continue to believe that our sustained investment in aerospace and energy markets will continue to drive profitable growth over the next several years."

The company said that aerospace and defense sales were up 36 percent year on year, with demand for superalloy engine materials remaining strong due to higher build rates and initial pull-through for new engine programs.

Meanwhile, demand growth for material used in oil and gas applications outpaced weaker demand for power generation materials.

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