Specialty alloys producer Carpenter Technology Corp. (CRS) on Monday revised downward its fourth-quarter profit announced on July 31 to reflect an increase in special litigation reserve as a result of a recent trial court ruling related to environmental activities from more than 30 years ago.
The company said that the special litigation reserve has been increased by about $16 million to $21 million, or $0.28 per share.
With the adjustment, the company's fourth-quarter net income from continuing operations is $37.4 million, or $0.81 per share, compared to $46.9 million, or $1.01 per share, reported previously. For fiscal 2008, the revised net income is $200.5 million, or $4.12 per share.
According to the company, the increase in special litigation reserve follows a recent trial court decision in an environmental action involving the alleged disposal of Carpenter manufacturing wastes at a site in Bucks County, Pennsylvania. The alleged disposal occurred in 1973 - 1974 by an independent transporter who was hired by Carpenter to dispose of the wastes properly. The court found that the transporter, instead, deposited the materials on his own family farm that is currently the site of an ongoing cleanup. Carpenter expects to appeal the decision.
For the year-ago quarter, the company posted net income of $61.3 million, or $1.17 per share, and income from continuing operations, including special litigation reserve of $0.08 per share, of $46.9 million or $1.01 per share.
Carpenter Technology said it intends to file its annual report on Form 10-K for its fiscal year 2008 on Monday.
For the fourth-quarter, net sales were $556.3 million, up from $533.3 million prior-year quarter. Excluding surcharge revenue, net sales from continuing operations rose 12% to $391.3 million.
By markets, revenue from aerospace rose 10%, energy market grew 18%, industrial market increased 4%, and medical market grew 11% over the prior-year quarter. However, sales from consumer market decreased 11% and automotive sales declined 14% from a year ago. Sales outside the U.S were up 13% in the quarter.
While announcing the fourth-quarter results earlier, Anne Stevens, chairman, president and chief executive officer, said, "Our first half will be subject to capacity constraints on our premium melt products that should be relieved when the new melting facility and other equipment upgrades come on line around the beginning of the 2009 calendar year."
CRS is trading at $37.40, down $1.75, on a volume of 277,479 shares.
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