Carpenter Technology Corp., a specialty alloys company, recently released its fiscal year 2021 preliminary outlook, which also includes the fourth quarter of fiscal year 2020.
Despite the pandemic, the company expects free cash flow and positive earnings before interest, taxes, depreciation, and amortization in fiscal year 2021. The company said approximately 25 percent to 30 percent of its operating costs are fixed costs.
During the fourth quarter of fiscal year 2020, the company forecasts the Specialty Alloys Operations segment will see volumes drop by 20 percent to 30 percent. The Performance Engineered Products segment also has been negatively impacted by the pandemic.
Inventory will be reduced by $100 million to $120 million in the quarter, according to company estimates, and free cash flow will be between $90 million and $100 million.
“We are operating in a challenging environment that makes it difficult to predict the near term with a reasonable level of certainty,” Tony R. Thene, president and CEO, said. “Many stakeholders continue to ask questions about our end-use market demand conditions, order book, lead times, workforce levels, utilization, and liquidity position, among other indicators. Despite the near-term challenges associated with the COVID-19 pandemic, our facilities have been continuously and safely operating during the crisis, we further strengthened our already healthy liquidity position, and the long-term outlook for our key end-use markets remains solid.”