New Report Preview – Stainless Steel

Carpenter Technology (CRS) reported DecQ (fiscal 2Q) diluted earnings of $0.52/share, which adjusted to $0.57/share excluding costs related to the acquisition of Latrobe Specialty Metals, ahead of the Street’s $0.51/share.

Guidance for the second half of fiscal 2012 (ending in June) was for higher volume, revenue and operating income levels on the Carpenter business compared to the first half with the company still on track to achieve the full-year target of a 50% increase in operating income (excluding non-cash pension EID expense).  Management said second half margins will likely remain around current levels as the benefits from higher volume are offset by some negative LIFO impact from reducing inventory at current nickel prices.  Regarding the Latrobe acquisition, the company still expects positive EPS accretion in the first full year of ownership, although there will be some initial costs immediately following closing (sometime in MarQ), which will cause a small negative EPS impact in the remainder of fiscal year 2012.

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