Carpenter Technology Corp filed its 10-Q with the SEC, and its figures are now in our data. Revenue over the twelve months to Q1 2027 was $3.19 billion, which rose 10.2% on the year before. That growth rate was up 1.6 percentage points on the rate a quarter earlier.

What stands out

Capital spending rose 63.3%, faster than operating cash flow’s 40.8%. Because spending grew more quickly than cash generation, less of the cash generated was left over.

Growth and profit

The company converted its sales growth into higher profits. Net income over the twelve months was $569.8 million, which rose 37.7% on the year before. This profit growth outpaced the 10.2% rise in revenue. The trailing operating margin was 23.4%, up 4.0 percentage points from a year earlier. The trailing gross margin was 31.2%. The trailing net margin was 17.9%.

Cash flow

Operating cash flow over the twelve months was $618.6 million, up 40.8% on the year before. Capital spending was $277.8 million, or 8.7% of revenue. Free cash flow, operating cash flow less capital spending, was $340.8 million, up 26.6% on the year before. Free cash flow was 10.7% of revenue (the free-cash-flow margin), up 1.4 percentage points from a year earlier. The average diluted share count fell 0.8% over the year.

In context

Today’s free-cash-flow margin of 10.7% is higher than 91% of the company’s own past quarterly readings, which have ranged from −8.5% to 14.1%. Today’s operating margin of 23.4% is higher than 100% of the company’s own past quarterly readings, which have ranged from −21.9% to 22.5%. Today’s twelve-month revenue growth rate of 10.2% is higher than 59% of the company’s own past quarterly readings, which have ranged from −37.5% to 97.6%.

Guidance

The company gave its Q2-27 guidance for Operating Income for SAO: $214.0 million to $218.0 million. The company gave its fiscal year 2027 guidance for Free Cash Flow (adjusted): $400.0 million to $430.0 million. The company gave its FY27 guidance for Operating Income Outlook (% increase): 21% to 25%. The company gave its FY29 guidance for Operating Income Target CAGR: 20% to 23%.

What it means for value

In our model, growth 5 percentage points lower would lower the value by 26.3%, and 5 percentage points higher would raise it by 34.1%. A free-cash-flow margin 1 percentage point lower would lower it by 9.3%.

What to watch

The next filing will show whether the company maintains its current operating margin levels as it executes its capital spending plans. It will also reveal if the free-cash-flow margin continues to expand or stabilizes relative to its historical range. Investors should look for updates on the pace of revenue growth against the company’s stated operating income targets.