8 annotations
Well, Michael, I think the overall aerospace and defense market in total is growing and going to be growing for quite some time. I agree with the phrase some people use as we're in a super cycle, and I agree with that. And I think any time we see even build rates being pushed out, that just extends the super cycle.
So there is demand across all subsegments of aerospace.
As you know, I believe in Carpenter, we supply to OEM, MRO, narrowbody, widebody, Boeing, Airbus, what it might be.
supply eveeywhere
Transcript
2024 Q3
3 May 24
In closing, let me leave you with 5 big takeaways from this call: one, we beat our guidance for the third quarter, up 29% sequentially off an already strong second quarter; 2, we increased our guidance for the fourth quarter, guiding to be up another 25% sequentially off a record third quarter; 3, we generated meaningful cash flow for the current quarter, and we expect to increase cash flow in the fourth quarter; 4, due to our exceptional performance and strong outlook, we are pulling forward our FY '27 guidance by 1 year at this time, maintaining our conservative approach to external guidance; and 5, in terms of earnings growth, we are just getting started and early in our cycle.
5 takeaways
Transcript
2024 Q3
3 May 24
This update maintains our conservative approach to our external guidance and the importance we place on doing what we say. We do see a path to pulling the FY '27 target and even sooner than the 1 year, and we'll certainly keep you updated as we continue to accelerate performance.
pull forward by 1 year, but could be more
Transcript
2024 Q3
3 May 24
And then just as far as the 737 MAX issues and production rates as those are digested. How quickly can you change your aerospace spot demand to move into the aftermarket or other programs? Or just within the spot market, how -- what do you expect as far as the fungibility of demand? And do you expect the big impact from the MAX near term?
Tony Thene
Let me take a step back just as I had a couple of notes and maybe answer it this way, Josh, and see if I hit your point and please follow up because I think it is an important point that was big news that came out obviously, late last night. And I can say, we see no material impact to our second half of FY '24, obviously, just because of the lead times.
The financial projections that we put out there today.
If you move more to the long term, I think it is important to recognize because it is -- it does get a very hot topic that there's really no changes to the underlying demand for air travel or the significant increases that are projected going forward, right? So airlines need more airplanes delivered to them. That's why you see record Airbus orders last year. And that point has been reaffirmed, I think, over and over by airline operators who continue to push for more planes to be delivered.
Obviously, you talked about MRO, the industry needs new planes as we get older planes flying and that increases MRO needs.
So in this case here, if you would see any type of movement on the OEM side, that MRO demand would go up even further. And certainly, Carpenter Technology, we're central part and delivering that demand, whether it be OEM or MRO because as you know where we're at in the supply chain, our product can branch out into many different ways.
discidsdsion around OEM m,arket re: boeing issues
Transcript
2024 Q2
9 Feb 24
As I've detailed in previous calls, our goal is to double fiscal year 2019 operating income by fiscal year 2027. These figures imply a 40% compounded annual growth rate on the operating income from fiscal year 2023 through fiscal year 2027.
As you can see, we are projected to take a meaningful step this fiscal year with projected operating income in the range of $310 million to $330 million, we expect to realize approximately 50% of the opportunity in fiscal year 2024.
Further, we believe that there's opportunity to accelerate the realization of the current FY '27 target. And given our strong position in the market, that growth opportunities will continue beyond fiscal year 2027.
2027 target discussion
Transcript
2024 Q2
9 Feb 24
With those details in mind, we reported a negative adjusted free cash flow of $11 million in the second quarter of fiscal year 2024 or roughly negative $25 million in the first half of fiscal year 2024, compared with negative $196 million in the first half of fiscal year 2023.
We anticipate that for fiscal year 2024, we will generate meaningful positive free cash flow.
As I mentioned earlier, the free cash flow generation will be driven by increasing earnings and managing inventory levels for the balance of the year.
fcf to come in 2024
Transcript
2024 Q2
9 Feb 24
Notably, SAO's adjusted operating margin reached 20% in the quarter, up from 19.4% in the first quarter of fiscal year 2024 and 16.8% in the fourth quarter of fiscal year 2023. We anticipate our margins will continue to improve with productivity improvements and a richer product mix.
margin expansion
Transcript
2024 Q2
9 Feb 24
he medical end-use market, demand remains strong, supported by patient backlogs and the broader macro trends of improving patient outcomes and an aging population. Like aerospace, our medical customers also remain focused on securing supply with multiple customers completing supply agreements with us over the last quarter.
Our medical sales in the quarter were up 10% sequentially and up 16% year-over-year. This was a record quarter for medical sales, following a very strong first quarter and reflects concerted efforts to accelerate shipments.
Our medical customers continue to emphasize the tight link between our material flow and patient surgeries, and we understand our critical role in the supply chain.
In our other end-use markets, demand for our premium solutions remains positive. Transportation demand has stabilized after supply chain disruptions over the last quarter. Energy demand, both for oil and gas and power generation remains very high as the world continues to focus on balancing energy supply with demand.
And in other areas like our semiconductor submarket, long-term demand remains strong, supported by solid underlying fundamentals, such as increased connectivity and computing needs. Altogether, we continue to see high demand for our premium solutions, which are critical enablers of the applications they support.
end market commentary
Transcript
2024 Q2
30 Jan 24
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