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Carpenter Technology announces Q2 FY 2012 segment results
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Monday, 30 Jan 2012
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Aerospace & Defense market sales were USD 192.2 million in the second quarter, up 26% compared with the same period a year ago. Excluding surcharge revenue, aerospace & defense sales were up 25% on 12% higher volume. Aerospace results reflected strength in all areas. Demand for titanium fastener material is nearing record levels, and demand for nickel and stainless fastener material has shown significant growth over the last year. Expectations remain unchanged for continued aerospace fastener growth. Demand for engine components remains strong, driven by high build rates. Increased sales of materials used in aerospace structural components contributed 11 points of the Aerospace growth rate this quarter. Aerospace structural applications that use high value, proprietary alloys is a focus area for the Company.

Industrial & Consumer market sales were USD 105.0 million, down 7% compared with the second quarter of fiscal year 2011. Excluding surcharge revenue, industrial & consumer sales were unchanged on 19% lower volume. The year over year results reflect the continued impact of mix management and pricing actions. Volume declines were mainly related to reduced sales of lower value materials used for general industrial, housing and appliance applications. Improved mix was due to increased sales of higher value alloys used in precision fittings, powder near net shape components, and select magnetic applications.

Energy market sales of USD 61.3 million increased 48% from the second quarter a year earlier. Excluding surcharge revenue, energy market sales increased 58% on 23% higher volume. The higher revenue was again driven primarily by the Amega West acquisition which contributed 34% of the total revenue growth. The remaining revenue and volume growth of 24% and 23%, respectively, is attributable to increased demand for materials used in both industrial gas turbines and the oil and gas segment. Activity in the industrial gas turbine market continues to grow as natural gas prices remain low and utilities shift away from coal fired power plants. The oil and gas segment also continued to grow with the directional drilling rig count hitting another new peak this quarter.

Medical market sales were USD 31.7 million in the second quarter, up 22% from a year ago. Excluding surcharge revenue, medical market sales increased 30% on 16% higher volume. Nearly half of the volume growth came from increased sales of higher value titanium products, which had a positive impact on mix. There was also broad based growth across the balance of the product portfolio.

Transportation market sales were USD 31.4 million, a decrease of 4% from a year earlier. Excluding surcharge revenue, transportation sales declined 2% on 18% lower volume. Overall lower volumes relate to mix management actions that targeted a reduction of lower value products. At the same time, sales grew for high value materials required in turbo charger, gasket and fuel system applications, used in smaller, higher efficiency turbo charged engines, particularly in Europe.

International sales in the second quarter were USD 142.5 million, an increase of 20% compared with the same quarter a year earlier driven by a 28% increase in European sales. Overall international growth was led by increased demand for materials used for aerospace, high value automotive applications and industrial gas turbines. Total international sales in the quarter represented 33% of total Company revenue, compared with 32% in the prior year.

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