UNITED STATES
                    SECURITIES AND EXCHANGE COMMISSION
                          WASHINGTON, D.C.  20549

                                 FORM 10-Q


/ x/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
     SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 1994 

                                    OR

/  / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE 
     SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________ to ______________

Commission File Number   1-5828 
                      -------------

                     CARPENTER TECHNOLOGY CORPORATION
          (Exact name of Registrant as specified in its Charter)


                DELAWARE                        23-0458500  
    -------------------------------          ------------------
    (State or other jurisdiction of          (I.R.S. Employer
    incorporation or organization)           Identification No.)


101 West Bern Street, Reading, Pennsylvania     19612-4662  
- -------------------------------------------     ----------
 (Address of principal executive offices)       (Zip Code)


                               215-208-2000  
                            ------------------
           (Registrant's telephone number, including area code)


     Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.          
                                                    Yes  X     No    
                                                        ---      ---
Indicate the number of shares outstanding of each of the issuer's
classes of common stock as of April 30, 1994.

Common stock, $5 par value                     8,066,419         
- --------------------------           ----------------------------
        Class                        Number of shares outstanding

The Exhibit Index appears on page E-1.



                     CARPENTER TECHNOLOGY CORPORATION


                                 FORM 10-Q


                                   INDEX




                                                           Page  


Part I  FINANCIAL INFORMATION

  Consolidated Balance Sheet March 31, 1994 (Unaudited)
    and June 30, 1993..................................... 3 & 4

  Consolidated Statement of Income (Unaudited) for the 
    Three and Nine Months Ended March 31, 1994 and 1993... 5 & 6

  Consolidated Statement of Cash Flows (Unaudited) for the 
    Nine Months Ended March 31, 1994 and 1993.............   7

  Notes to Financial Statements........................... 8 - 11

  Management's Discussion.................................11 & 12


Part II  OTHER INFORMATION................................13 & 14

Exhibit Index.............................................   E-1






<PAGE>

PART I
             CARPENTER TECHNOLOGY CORPORATION AND SUBSIDIARIES
                 CONSOLIDATED BALANCE SHEET (Page 1 of 2)
                     March 31, 1994 and June 30, 1993



                                             In Thousands      
                                         ----------------------     
                                         March 31      June 30
                                            1994         1993  
                                         ---------     --------   
                                        (Unaudited)
ASSETS

Current assets: 

  Cash and cash equivalents             $  5,032       $ 45,822

  Accounts receivable                     93,089         90,426

  Inventories                             70,662         70,590

  Deferred income taxes                    1,347          2,737
 
  Other current assets                     6,076          7,120
                                        --------       --------

    Total current assets                 176,206        216,695
                                        --------       --------



Property, plant and equipment, 
  at cost                                723,421        699,269

Less accumulated depreciation 
  and amortization                       327,212        308,140
                                        --------       --------
                                         396,209        391,129
                                        --------       --------
Prepaid pension cost                      70,374         61,602
                                        --------       --------
Investment in joint venture               47,227              -
                                        --------       --------
Other assets                              39,882         30,139
                                        --------       --------



Total assets                            $729,898       $699,565
                                        ========       ========







              See accompanying notes to financial statements.
              

<PAGE>
             CARPENTER TECHNOLOGY CORPORATION AND SUBSIDIARIES
                 CONSOLIDATED BALANCE SHEET (Page 2 of 2)
                     March 31, 1994 and June 30, 1993

                                              In Thousands      
                                          ---------------------
                                          March 31     June 30
LIABILITIES                                 1994         1993  
                                          --------     --------
                                        (Unaudited)
Current liabilities: 
  Short-term debt                       $    556       $      -
  Accounts payable                        42,051         24,328
  Accrued compensation                     9,822         14,457
  Accrued income taxes                     2,299          2,080
  Other accrued liabilities               22,254         25,951
  Current portion of long-term debt       15,619          6,617
                                        --------       -------- 
    Total current liabilities             92,601         73,433
                                        --------       --------
Long-term debt, net of current portion   167,589        189,895
                                        --------       --------
Accrued postretirement benefits          147,719        143,876
                                        --------       --------
Deferred income taxes                     77,128         66,765
                                        --------       --------
Other liabilities and deferred income     16,974          7,135
                                        --------       --------
SHAREHOLDERS' EQUITY

Preferred stock, $5 par value - 
  authorized 2,000,000 shares; issued 
  460.6 shares at March 31, 1994 and 
  461.2 shares at June 30, 1993           29,090         29,128

Deferred compensation                    (25,979)       (27,431)

Common stock, $5 par value - 
  authorized 50,000,000 shares; issued  
  9,587,822 shares at March 31, 1994 
  and 9,508,355 shares at June 30, 1993   47,938         47,542

Capital in excess of par value            49,580         46,131

Reinvested earnings                      194,567        189,241

Foreign currency translation 
  adjustments                             (1,159)             -

Common stock in treasury, at cost -
  1,522,584 shares                       (66,150)       (66,150)
                                        --------       --------
  Total shareholders' equity             227,887        218,461
                                        --------       --------
Total liabilities and 
  shareholders' equity                  $729,898       $699,565
                                        ========       ========

             See accompanying notes to financial statements.  


<PAGE>
             CARPENTER TECHNOLOGY CORPORATION AND SUBSIDIARIES
              CONSOLIDATED STATEMENT OF INCOME (Page 1 of 2)
                                (Unaudited)
        for the Three and Nine Months Ended March 31, 1994 and 1993

                            Three Months        Nine Months   
                          ------------------------------------
                            1994     1993      1994     1993  
                            ----     ----      ----     ----
                          (in thousands, except per share data)

Net Sales                 $174,347 $155,370  $450,903 $417,782
                          -------- --------  -------- --------
Costs and expenses:

  Cost of sales            123,728  113,503   329,075  318,672

  Selling & administrative
    expenses                24,289   20,027    68,109   61,110

  Interest expense           3,499    5,189    12,713   15,430

  Other expense (income)     1,112     (663)      399   (1,908)
                          -------- --------  -------- --------
                           152,628  138,056   410,296  393,304
                          -------- --------  -------- --------
Income before income 
  taxes, extraordinary 
  charge and cumulative
  effect of changes in 
  accounting principles     21,719   17,314    40,607   24,478

Income taxes                 8,894    7,112    17,650    9,710
                          -------- --------  -------- --------
Income before extra-
  ordinary charge and
  cumulative effect 
  of changes in 
  accounting principles     12,825   10,202    22,957   14,768

Extraordinary charge, 
  net of income taxes       (2,039)       -    (2,039)       -

Cumulative effect of 
  changes in accounting
  principles, net of
  income taxes                   -        -         -  (74,676)
                          -------- --------  -------- --------
Net income (loss)         $ 10,786 $ 10,202  $ 20,918 $(59,908)
                          ======== ======== ========= ========






              See accompanying notes to financial statements.
              

<PAGE>
             CARPENTER TECHNOLOGY CORPORATION AND SUBSIDIARIES
              CONSOLIDATED STATEMENT OF INCOME (Page 2 of 2)
                                (Unaudited)
        for the Three and Nine Months Ended March 31, 1994 and 1993


                            Three Months        Nine Months   
                          ------------------------------------
                            1994     1993      1994     1993  
                            ----     ----      ----     ----
                          (in thousands, except per share data)

Primary earnings per 
  common share:

  Income before extra-
    ordinary charge and
    cumulative effect 
    of changes in 
    accounting principles $   1.54 $   1.22  $   2.70 $   1.69

  Extraordinary charge        (.25)       -      (.25)       -
  Cumulative effect of 
    changes in
    accounting principles        -        -         -    (9.32)
                          -------- --------  -------- --------
  Earnings (loss) per 
    common share          $   1.29 $   1.22  $   2.45 $  (7.63)
                          ======== ========  ======== ========   
 Weighted average common
    shares outstanding       8,101    7,963     8,050    8,025
                          ======== ========  ======== ========
Fully-diluted earnings 
  per common share:

  Income before extra-
    ordinary charge and
    cumulative effect 
    of changes in
    accounting principles $   1.49 $   1.19  $   2.63 $   1.67
  Extraordinary charge        (.24)       -      (.24)       -
  Cumulative effect of 
    changes in 
    accounting principles        -        -         -    (8.80)
                          -------- --------  -------- --------
  Earnings (loss) per 
    common share          $   1.25 $   1.19  $   2.39 $  (7.13)
                          ======== ========  ======== ========
  Weighted average common 
    shares outstanding       8,571    8,424     8,538    8,486
                          ======== ========  ======== ========
Dividends per common      
  share                   $    .60 $    .60  $   1.80 $   1.80
                          ======== ========  ======== ======== 




              See accompanying notes to financial statements.
              

<PAGE>
             CARPENTER TECHNOLOGY CORPORATION AND SUBSIDIARIES
                   CONSOLIDATED STATEMENT OF CASH FLOWS
                                (Unaudited)
              for the Nine Months Ended March 31, 1994 and 1993

                                                   1994         1993
                                                   ----         ----
                                                     (in thousands)
OPERATIONS
Net income (loss)                               $ 20,918     $(59,908)
Adjustments to reconcile net income (loss)
  to net cash provided from operations:
    Depreciation and amortization                 21,612       19,948
    Deferred income taxes                          6,231        4,614
    Pension credits                              (10,135)      (8,864)
    Extraordinary charge                           2,039            -
    Equity in losses of joint venture              1,055            -
    Cumulative effect of changes in 
      accounting principles                            -       74,676
Changes in working capital and other: 
    Receivables                                    1,686       (2,192)
    Inventories                                   12,327       42,250
    Other                                         21,037       (9,502)
                                                --------     -------- 
Net cash provided from operations                 76,770       61,022
                                                --------     --------
INVESTING ACTIVITIES
Investment in joint venture                      (48,282)           -
Acquisition of wholly-owned 
  subsidiaries, net of cash received             (22,200)           -
Purchases of plant and equipment                 (21,084)     (15,556)
Disposals of plant and equipment                   1,334          293
                                                --------     --------
Net cash used for investing activities           (90,232)     (15,263)
                                                --------     --------
FINANCING ACTIVITIES
Payments on short-term debt                       (2,239)           -
Proceeds from issuance of long-term debt          45,851            -
Payments on long-term debt                       (59,155)      (3,944)
Payments to acquire treasury stock                     -      (11,633)
Proceeds from issuance of stock                    3,807          351
Dividends paid                                   (15,592)     (15,686)
                                                --------     --------  
Net cash required by financing activities        (27,328)     (30,912)
                                                --------     --------
INCREASE(DECREASE) IN CASH & CASH EQUIVALENTS    (40,790)      14,847 
Cash and cash equivalents at 
  beginning of period                             45,822        9,321
                                                --------     -------- 
Cash and cash equivalents at 
  end of period                                 $  5,032     $ 24,168
                                                ========     ========
Supplemental Data:
  Interest payments                             $ 16,450     $ 18,794
  Income tax payments (net of refunds)          $ 11,414     $  2,478

                See accompanying notes to financial statements.
                

<PAGE>

                       NOTES TO FINANCIAL STATEMENTS

 1.  Basis of Presentation
     ---------------------
          The accompanying unaudited consolidated financial
     statements have been prepared in accordance with the
     instructions to Form 10-Q and do not include all of the
     information and footnotes required by generally accepted
     accounting principles for complete financial statements.  In
     the opinion of management, all adjustments (consisting only
     of normal recurring accruals) considered necessary for a
     fair presentation have been included.  Operating results for
     the nine months ended March 31, 1994, are not necessarily
     indicative of the results that may be expected for the year
     ending June 30, 1994.  For further information, refer to the
     consolidated financial statements and footnotes included in
     the Company's 1993 Annual Report to Shareholders.  

          The June 30, 1993 condensed balance sheet data was
     derived from audited financial statements, but does not
     include all disclosures required by generally accepted
     accounting principles.

 2.  Earnings Per Common Share
     -------------------------
          Primary earnings per common share are computed by
     dividing net income less preferred dividends net of tax
     benefits by the weighted average number of common shares and
     common share equivalents outstanding during the period.

          Fully diluted earnings per share are computed by
     dividing net income (less the amount of additional after-tax
     contribution the Company would be required to make to its
     ESOP if the preferred shares were converted to common stock)
     by the weighted average number of common shares and common
     share equivalents during the period.

 3.  Inventories
     -----------
                                        March 31        June 30
                                          1994            1993  
                                        --------        --------
                                             (in thousands)

     Finished                           $ 82,616       $ 97,129
     Work in process                      80,620         80,072
     Raw materials and supplies           28,809         31,472
                                        --------       --------
     Total at current cost               192,045        208,673

     Excess of current cost
       over LIFO values                  121,383        138,083
                                        --------       --------
     Inventory per Balance Sheet        $ 70,662       $ 70,590
                                        ========       ========


<PAGE>
 3.  Inventories, continued
      -----------
          Inventories at March 31, 1994 include finished
     inventory of Aceros Fortuna, S.A. de C.V., a Mexican steel
     distribution company which was acquired in July 1993.  This
     company's inventories are valued using the FIFO method.

          The cost of LIFO-valued inventories was $165,026,000 at
     March 31, 1994 and $192,743,000 at June 30, 1993.  Reduction
     in LIFO-valued inventories resulted in an increase in net
     income of approximately $5,500,000 or $.68 per share and
     $9,100,000 or $1.13 per share for the three and nine months
     ended March 31, 1994, respectively, and approximately
     $6,400,000 or $.80 per share and $7,000,000 or $.88 per
     share for the three and nine months ended March 31, 1993,
     respectively.

 4.  Investment in Joint Venture
     ---------------------------
          On September 2, 1993, the Company acquired, for
     $45,000,000 in cash, 19 percent of the shares of Walsin-
     CarTech Specialty Steel Corporation, a joint venture with
     Walsin Lihwa Corporation in Taiwan.  The joint venture is in
     the process of constructing a facility in Taiwan to
     manufacture and distribute specialty steel.  The Company has
     an option to acquire up to an additional 16 percent of the
     outstanding shares of the venture from Walsin Lihwa at
     anytime until July 1, 1996.  Alternatively, the Company may
     require Walsin Lihwa to purchase its 19 percent ownership
     for the original purchase cost at anytime up to July 1,
     1997.  This investment is being accounted for using the
     equity method of accounting.  The investment account has
     been increased for interest costs capitalized during the
     preoperating period totaling $1,090,000 and $2,660,000,
     respectively, for the three and nine months ended
     March 31, 1994, and for certain acquisition expenses.

          A separate agreement also provides for the Company to
     provide marketing and technical assistance to the joint
     venture in exchange for an initial lump sum royalty payment
     of $10,000,000, received in October 1993, and continuing
     royalties based on sales over the 10-year term of the
     agreement.  The initial lump sum royalty has been deferred
     and is being recognized as income over the term of the
     agreement.

 5.  Acquisition of Wholly-Owned Subsidiaries
     ----------------------------------------
          On July 28, 1993, the Company acquired all of the
     outstanding shares of Aceros Fortuna, S.A. de C.V., a
     Mexican steel distribution company, and two affiliated
     companies for cash of $20,400,000.  In addition, the Company
     paid $2,500,000 for agreements not to compete, and acquired
     equipment from an affiliated company in Mexico for
     $5,100,000.


<PAGE>
 5.  Acquisition of Wholly-Owned Subsidiaries, continued
      ----------------------------------------
          The acquisition has been accounted for using the
     purchase method of accounting, and accordingly, the purchase
     price has been allocated to the assets purchased and the
     liabilities assumed based upon the preliminary estimated
     fair values at the date of acquisition.  The excess of
     purchase price over the preliminary estimated fair values of
     the net assets acquired approximated $7,000,000 and has been
     recorded as goodwill, which is being amortized over 20
     years.

          The operating results of these acquired businesses have
     been included in the Consolidated Statement of Income from
     the date of acquisition.  On the basis of a pro forma
     consolidation of the results of operations as if the
     acquisition had taken place at the beginning of the fiscal
     year 1993 rather than at July 28, 1993, consolidated net
     sales would have been $453,600,000 for the nine months ended
     March 31, 1994, and $163,500,000 and $443,200,000 for the
     three and nine months ended March 31, 1993, respectively. 
     Consolidated pro forma net income and earnings per share,
     before the cumulative effect of accounting changes and
     extraordinary charge, would not have been materially
     different from the reported amounts for the three and nine
     months ended March 31, 1994 and 1993.  Such pro forma
     amounts are not necessarily indicative of what the actual
     consolidated results of operations might have been if the
     acquisition had been effective at the beginning of fiscal
     1993.

 6.  Changes in Accounting Principles
     --------------------------------
          During the fourth quarter of fiscal 1993, the Company
     adopted, retroactive to July 1, 1992, two new financial
     accounting standards, "Employers' Accounting for
     Postretirement Benefits Other than Pensions" (SFAS 106) and
     "Accounting for Income Taxes" (SFAS 109).

          SFAS 106 requires companies to accrue the cost of
     postretirement benefits over the years employees provide
     services to the date of their full eligibility for such
     benefits.  Previously, these costs were expensed as claims
     were incurred.  The Company elected to immediately recognize
     the transition obligation for benefits earned as of July 1,
     1992, resulting in a non-cash charge of $146,802,000 pre-tax
     ($87,113,000 after tax or $10.87 per share), representing
     the cumulative effect of the change in accounting.

          SFAS 109 changes the method of accounting for income
     taxes from the deferral method to the asset/liability
     method.  Under this method, deferred income taxes are
     determined based on enacted tax laws and rates, which are
     applied to the differences between the financial statement
     bases and tax bases of assets and liabilities.  The adoption
     of this statement resulted in a credit to income of  
     

<PAGE>
6.  Changes in Accounting Principles, continued
     --------------------------------
     $12,437,000 ($1.55 per share) principally for the cumulative
     effect of restating deferred taxes as of July 1, 1992 to
     current tax rates.

          Results for the three and nine months ended March 31,
     1993 have been restated to include the effects of these
     accounting changes which reduced income before income taxes
     by $2,200,000 and $5,700,000 and income before the
     cumulative effect of accounting changes by $2,200,000 or
     $.28 per share and $4,500,000 or $.56 per share,
     respectively.

 7.  Debt Arrangements
     -----------------
          In January 1994, the Company entered into a
     $150,000,000 financing arrangement with a number of banks,
     providing for the availability of $125,000,000 of revolving
     credit to January 1998 and lines of credit of $25,000,000. 
     Interest is based on short-term market rates or competitive
     bids.  This financing arrangement replaces the previous
     revolving credit and lines of credit arrangement.

          During the quarter ended March 31, 1994, the Company
     purchased at a premium, the entire outstanding principal
     amount of $55,300,000 of its 12-7/8% sinking fund debentures
     originally due in 2014.  The purchase resulted in an
     extraordinary charge of $2,039,000, net of $1,206,000 of tax
     benefit, or $.25 per share.  Funding for the purchase came
     from the Company's short-term credit facilities, which are
     intended to be replaced with Medium-Term Notes in the
     future.  On December 21, 1993, the Company filed a shelf
     registration statement (effective January 6, 1994) with the
     Securities and Exchange Commission for the issuance of up to
     $100,000,000 of Medium-Term Notes.


        MANAGEMENT'S DISCUSSION & ANALYSIS OF RESULTS OF OPERATIONS
        -----------------------------------------------------------
Third Quarter Results:
- ---------------------
     Income for the quarter ended March 31, 1994 was $12.8
million, before an extraordinary charge of $2.0 million after
taxes, or $.25 per share (see Note 7 above).  

     Primary earnings before the extraordinary charge were $1.54
per share, 26% higher than the $1.22 per share earned a year ago. 
Including the extraordinary charge, third quarter net income was
$10.8 million, or $1.29 per share.  The improved results were
primarily due to higher unit volume.

     Sales for the third quarter were $174.3 million, up 12
percent from the $155.4 million for the same period a year ago. 
This increase was a result of improved demand in the Steel
Division, and the inclusion of the sales of Aceros Fortuna, a
Mexican steel distribution subsidiary acquired in July 1993.


<PAGE>

        MANAGEMENT'S DISCUSSION & ANALYSIS OF RESULTS OF OPERATIONS
         -----------------------------------------------------------
                                (continued)

Third Quarter Results, continued
- ---------------------
     Cost of sales as a percent of net sales decreased to 71
percent in the current quarter from 73 percent in last year's
third fiscal quarter.  This improved cost level was due to lower
raw material costs, sales mix improvements and a higher
production level.  

     Inventories valued by the last-in, first-out method were
reduced during the third quarter of both years, resulting in
decreases in costs of $8.6 million before taxes or $.68 per
share after taxes in the current year, and by $9.9 million
before taxes or $.80 per share after taxes a year ago.

Nine Month Results:
- ------------------
     For the first nine months of the current fiscal year, income
before the extraordinary charge was $23.0 million or $2.70 per
share, versus $14.8 million, or $1.69 per share for the same
period last year before a one-time charge for changes in
accounting principles.

     Sales revenues were $450.9 million for the nine month
period, an eight percent increase from the $417.8 million
reported last year.  The higher sales included the results of
Aceros Fortuna, the Company's Mexican steel distribution business
which was acquired in July 1993, and increased demand for
specialty steel products in the United States.

     Cost of sales were 73 percent of sales in the current fiscal
year versus 76 percent a year ago.  This improved cost level was
due primarily to lower inventory levels and the use of the LIFO
inventory valuation method which reduced costs by $14.4 million
before taxes, or $1.13 per share after taxes, in the nine months
ended March 31, 1994 and $11.0 million before taxes, or $.88 per
share after taxes, in the same period a year ago.

     Earnings for the nine month period ending March 31, 1994,
were adversely affected by a one-time charge of $1.4 million, or
$.19 per share in the September 1993 quarter, to increase
deferred tax liabilities for a change in the corporate income tax
rate in August 1993.


<PAGE>

P
ART II - OTHER INFORMATION
 ----------------------------

     Item 1. Legal Proceedings.
     -------------------------
     There are no material pending legal proceedings to which the
Company is a party or of which its property is subject.  There
are no material proceedings to which any Director, Officer, or
affiliate of the Company, or any owner of more than five percent
of any class of voting securities of the Company, or any
associate of any Director, Officer, affiliate, or security holder
of the Company, is a party or has a material interest adverse to
the Company's interest.  There are no material proceedings with
environmental issues which involve a claim for damages, potential
sanctions or capital expenditures exceeding ten percent of the
current assets of the Company or which involve potential monetary
sanctions in excess of $100,000.


     Item 2. Changes in Securities.
     -----------------------------
     a.   There has been no material modification of any class of
registered securities, except for a Prospectus Supplement dated
January 12, 1994 with respect to the registration statement on
Form S-3 (Registration No. 33-51613) filed on December 21, 1993
with respect to the issuance of up to $100,000,000 of unsecured
Medium Term Notes which registration statement became effective
on January 6, 1994.

     b.   The Company's financing arrangements, including the
provisions of a certain Credit Agreement dated January 18, 1994
in the principal amount of $125,000,000, contain restrictions
which, among other things, limit the aggregate amount of the
Company's dividends.


     Item 5. Other Information. 
     -------------------------
     On March 1, 1994, the Company redeemed the full outstanding
balance of its 12-7/8% Debentures due 2014 ("Debentures") in the
principal amount of $55.3 million.  The redemption price was at a
premium over par equal to $1,061.62 per $1,000 of principal
amount of the Debentures plus accrued and unpaid interest.  The
redemption resulted in an extraordinary charge of $2.0 million
after taxes ($.25 per share).  The redemption was made to reduce
future interest costs.


     Item 6. Exhibits and Reports on Form 8-K.
     ----------------------------------------
          a.   The following document is filed as an exhibit:

               11.  Statement regarding computation of per share
                    earnings.

          b.   The Company filed no Reports on Form 8-K for
               events occurring during the quarter of the fiscal
               year covered by this report.  


     Items 3 and 4 are omitted as the answers are negative or the
items are not applicable.


<PAGE>

                                SIGNATURES
                                ----------
     Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.

                                 CARPENTER TECHNOLOGY CORPORATION
                                 -------------------------------- 
                                          (Registrant)




Date:  May 12, 1994              s/G. Walton Cottrell
     -------------------------   --------------------------------
                                   G. Walton Cottrell
                                   Sr. Vice President - Finance
                                     and Chief Financial Officer

<PAGE>







                               EXHIBIT INDEX
                               -------------

Exhibit No.                        Title                               Page
- -----------                        -----                               ----

     11             Statement regarding computation                     E-2
                    of per share earnings                                &
                                                                        E-3

















































                                      E-1

<PAGE>
                                                                 





            CARPENTER TECHNOLOGY CORPORATION AND SUBSIDIARIES        Exhibit 11
                  EARNINGS PER COMMON SHARE COMPUTATIONS
         For the Three and Nine Months Ended March 31, 1994 and 1993
                                          Three Months         Nine Months    
                                       ------------------  ------------------  
                                         1994      1993      1994      1993  
                                         ----      ----      ----      ---- 
                                       (in thousands, except per share data)
Net Income (Loss) for Primary
  Earnings Per Common Share
- ------------------------------
Income before extraordinary charge
  and cumulative effect of changes
  in accounting principles             $ 12,825  $ 10,202  $ 22,957  $ 14,768
Dividends accrued on convertible
  preferred stock, net of 
  income taxes                             (388)     (406)   (1,207)   (1,223)
                                       --------  --------  --------  --------
Income for primary earnings per
  common share before extraordinary
  charge and cumulative effect of
  changes in accounting principles       12,437     9,796    21,750    13,545
Extraordinary charge, net of 
  of income taxes                        (2,039)        -    (2,039)        -
Cumulative effect of changes  
  in accounting principles,
  net of income taxes                         -         -         -   (74,676)
                                       --------  --------  --------  --------
Net income (loss) for primary 
  earnings per common share            $ 10,398  $  9,796  $ 19,711  $(61,131)
                                       ========  ========  ========  ========
Weighted Average Common Shares
- ------------------------------
Weighted average number of
  common shares outstanding               8,047     7,956     8,011     8,023
Effect of shares issuable under
  the stock option plans                     54         7        39         2
                                       --------  --------  --------  --------
Weighted average common shares            8,101     7,963     8,050     8,025
                                       ========  ========  ========  ========
Primary Earnings (Loss) 
  Per Common Share
- -----------------------
Primary earnings per common share
  before extraordinary charge
 and
  cumulative effect of changes in
  accounting principles                $   1.54  $   1.22  $   2.70  $   1.69
Extraordinary charge                       (.25)        -      (.25)        -
Cumulative effect of changes in
  accounting principles                       -         -         -     (9.32)
                                       --------  --------  --------  --------
Primary earnings (loss) 
  per common share                     $   1.29  $   1.22  $   2.45  $  (7.63)
                                       ========  ========  ========  ========
Primary loss per common share for the cumulative effect of changes in account-
ing principles of $(9.32) is computed using the weighted average common shares
outstanding for the year ended June 30, 1993 of 8,009.  The result is not 
materially different from using the weighted average shares for the nine 
months ended March 31, 1993.
                                   E-2
<PAGE>
   
             CARPENTER TECHNOLOGY CORPORATION AND SUBSIDIARIES       Exhibit 11
                  EARNINGS PER COMMON SHARE COMPUTATIONS
        For the Three and Nine Months Ended March 31, 1994 and 1993
                                          Three Months         Nine Months    
                                       ------------------  ------------------  
                                         1994      1993      1994      1993  
                                         ----      ----      ----      ---- 
                                       (in thousands, except per share data)
Net Income (Loss) for Fully Diluted
  Earnings Per Common Share
- -----------------------------------
Income before extraordinary charge 
  and cumulative effect of changes
  in accounting principles             $ 12,825  $ 10,202  $ 22,957  $ 14,768
Shortfall between common and
  preferred dividend                       (128)     (193)     (525)     (589)
                                       --------  --------  --------  --------
Income for fully diluted earnings per
  common share before extraordinary
  charge and cumulative effect of 
  changes in accounting principles       12,697    10,009    22,432    14,179
Extraordinary charge, net of
  income taxes                           (2,039)        -    (2,039)        -
Cumulative effect of changes in
  accounting principles, net of
  income taxes                                -         -         -   (74,676)
                                       --------  --------  --------  --------
Net income (loss) for fully diluted
  earnings per common share            $ 10,658  $ 10,009  $ 20,393  $(60,497)
                                       ========  ========  ========  ========
Weighted Average Common Shares
- ------------------------------
Weighted average number of
  common shares outstanding               8,047     7,956     8,011     8,023
Conversion of preferred shares              461       461       461       461
Effect of shares issuable 
  under the stock option plans               63         7        66         2
                                       --------  --------  --------  --------
Weighted average common shares            8,571     8,424     8,538     8,486
                                       ========  ========  ========  ========
Fully Diluted Earnings (Loss)
  Per Common Share
- -----------------------------
Fully diluted earnings per common 
  share before extraordinary charge
  and cumulative effects of changes
  in accounting principles             $   1.49  $   1.19  $   2.63  $   1.67
Extraordinary charge                       (.24)        -      (.24)        -
Cumulative effect of changes
  in accounting principles                    -         -         -     (8.80)
                                       --------  --------  --------  --------
Fully diluted earnings (loss)
  per common share                     $   1.25  $   1.19  $   2.39  $  (7.13)
                                       ========  ========  ========  ========
Fully diluted loss per common share for the cumulative effect of changes in
accounting principles of $(8.80) is computed using the weighted average common
shares outstanding for the year ended June 30, 1993 of 8,009.  The result is
not materially different from using the weighted average shares for the nine
months ended March 31, 1993.           E-3