QUOTE AND NEWS
Benzinga  Dec 9  Comment 
Orbital Sciences Corporation (NYSE: ORB), one of the world's leading space technology companies, today announced new details in its plans to resume cargo flights to the International Space Station (ISS) and to accelerate the introduction of an...
Market Intelligence Center  Nov 17  Comment 
Option-trade picking algorithms patented by MarketIntelligenceCenter.com found a trading opportunity with Carpenter Technology Corp (CRS) that should provide a 3.65% return in just 123 days. Sell one Mar. '15 call at the $50.00 level for each 100...
Market Intelligence Center  Nov 10  Comment 
After Friday’s trading in Carpenter Technology Corp (CRS) the option-trade picking algorithms that power MarketIntelligenceCenter.com's Artificial Intelligence Center uncovered a trade that offers a 3.37% return, or 9.46% annualized (for...
Forbes  Oct 31  Comment 
Bargain hunters are wise to pay careful attention to insider buying, because although there are many various reasons for an insider to sell a stock, presumably the only reason they would use their hard-earned cash to make a purchase, is that they...
Benzinga  Oct 23  Comment 
Stocks in the steel sector were trending higher on Thursday, possibly due to the earnings beat of Carpenter Technology Corporation (NYSE: CRS). Carpenter reported EPS of $0.20 per share, beating estimates by 25 percent or $0.04 per...
Benzinga  Oct 23  Comment 
GT Advanced Technologies Inc (OTC: GTATQ) +30% - The company announced that it has reached a settlement agreement with Apple Inc. under which GT will be released from all exclusivity obligations under its various agreements with...
Benzinga  Oct 17  Comment 
Eagle Materials Inc. (NYSE: EXP) announced today that the company has entered into a definitive agreement to acquire CRS Proppants LLC and its subsidiaries, including Great Northern Sand LLC (CRS Proppants), an established supplier...
TheStreet.com  Oct 2  Comment 
Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link. aTheStreet Ratings quantitative algorithm...
TheStreet.com  Sep 26  Comment 
NEW YORK (TheStreet) --aCarpenter Technology Corp.'s estimates for the 2015 full year were lowered to $2.21 per share from $3.04 by analysts at Credit Suisse on Friday. The firm also reduced its full year 2016 estimates to $3.29 per share, from...




 

Carpenter Technology (NYSE:CRS) manufactures and distributes specialty metals and engineered products. The company earned $1.36 billion in revenue and $47 million in net income in 2009.[1]

The company focuses on niche steel alloys that can withstand extreme pressure and heat or have a specific appearance or chemical properties. The company's customers, which include the aerospace, industrial, consumer, automotive, medical, and energy industries, use this steel to make products such as aircraft engine blades, hip implants, drill collars for oil exploration, and high-definition televisions.[2] The specialized nature of its products allows Carpenter to charge higher prices.

Unlike most specialty steel makers, Carpenter manufactures but also distributes its products through its own worldwide network of service centers. These service centers allow Carpenter to build closer relationships with its customers, working with them to customize current products or develop new ones. Many of these customers are international, as about one-third of Carpenter's sales were come from foreign markets.

Company Overview

Carpenter Technology manufactures highly specialized products for niche markets. Many of these products are intended for use in high-stress and extreme-heat environments. The high specialization that characterizes Carpenter's product lines allows the company to demand premium prices for its products. Carpenter manufactures materials used in a wide range of projects, including industrial tools, jet engines, fuel injectors and medical implants.[3] Over the past few years, a shift in corporate strategy, including production of higher value materials, cost-cutting and increased international sales, has led to financial success for Carpenter Technology.[4]

Production by Segment and End-Use Market

Carpenter Technology divides its products into five major classifications: special metal alloys, stainless [screw tht company's special alloys and stainless steel segments have comprised the majority of Carpenter Technology's sales. A breakdown of sales by product class is below.[5]

  • Special Alloys - 51% of net sales
  • Stainless Steel - 34% of net sales
  • Titanium Products - 10% of net sales
  • Other Materials - 5% of net sales

Carpenter Technology produces for a number of markets, with aerospace as the primary customer. However, the industrial and consumer markets also represents a significant portion of production. A breakdown of sales by end-use market by revenue generated and by percentage of total sales is below:[6]

  • Aerospace - 42% of net sales
  • Industrial - 24% of net sales
  • Energy - 11% of net sales
  • Medical - 8% of net sales
  • Consumer - 8% of net sales
  • Automotive - 7% of net sales

Business Growth

FY 2009 (ended June 30, 2009)[1]

  • Net sales fell 30% to $1.36 billion. The company attributes the decline to the sluggish global economy as revenue decreased by more than 18% in all of its end-use markets, with the automotive segment suffering the greatest decline at 56%. Revenue in all of the company's product segments also fell by double digits with Special Alloys having the greatest drop at 32%. International sales fell by 26% for the year.
  • Net income decreased 83% to $48 billion.

Trends and Forces

  • Increasing competition in the Global Steel Industry :Rising international demand for steel, specifically from developing economies like China and India, has resulted in increases in the price of steel. If demand were to slow or stall, this would have negative effects on steel prices and revenues posted by the steel industry. Likewise, if demand continues to rise CRS will continue to enjoy revenue growth. International production has increased along with the rapid growth of international demand, and this threatens Carpenter's economic niche. China's growing role in the steel industry is still undetermined, but rapid growth in both demand and supply imply an ever-increasing role for the country. Carpenter has an advantage over other domestic steel producers in that its products are highly-specialized and directed towards niche markets, and new competitors are unlikely to quickly build the capacity to make products like Carpenter's.


  • The Airline Industry Must Continue to Demand Carpenter's Products: A growing proportion of the company's sales are directed towards the commercial aerospace market. This end market has recently experienced significant turbulence, especially since the terrorist attacks of 9/11. Increased apprehension about flying coupled with record high oil prices and frequent labor issues may make the future difficult for the airline industry. A decrease in demand from this sector would negatively impact Carpenter's sales.

Competition

Carpenter Technology distinguishes itself from its competitors by focusing on highly-specialized products rather than traditional commodity-type products. Still, stainless steel, traditionally a commodity product, composes one-third of the company's revenues. However, Carpenter manufactures only long and bar stainless steel, whereas close competitors such as AK Steel Holding (AKS) focus on the manufacture of flat-rolled products because of the larger US market. Carpenter also competes in the international markets, with international sales comprising about one-third of net sales. The company's domestic competitors in the stainless steel market are:[7]

References

  1. 1.0 1.1 CRS 2009 10-K "Selected Financial Data" pg. 15
  2. CRS Company Website
  3. CRS Company Website
  4. CRS 2009 10-K "Classes of Products" pg. 2-3
  5. CRS 2009 10-K pg 17.
  6. CRS 2009 10-K pg 17.
  7. CRS 2009 10-K "Competition" pg. 4-5
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