Cabot Corp. (CBT) Reports In-Line Q3 EPS, Slight Miss on Revenues

Cabot Corp. (NYSE: CBT) reported Q3 EPS of $1.06, in-line with the analyst estimate of $1.06. Revenue for the quarter came in at $854 million versus the consensus estimate of $855.25 million.

• Diluted EPS of $1.40, compared to $0.73 in the same period of the prior year; Adjusted EPS of $1.06, up 28% year-over-year
• Reinforcement Materials EBIT improved 45% versus prior year driven by strong commercial execution that delivered volume growth and higher unit margins
• Performance Chemicals EBIT up 22% year-over-year from robust sales volumes and pricing gains in Specialty Carbons and Formulations
• Continued commitment to returning cash to shareholders with $64 million of dividends and share repurchases in the quarter

Commenting on the results, Cabot President and CEO Sean Keohane said, “I am very pleased with the strong operating results this quarter as we continue to drive our growth strategy. Reinforcement Materials delivered another strong quarter with 45% growth in EBIT on a year-over-year basis driven by expanded unit margins from our leadership position in Asia and the delivery of volume growth and price improvements in our 2018 customer agreements. Performance Chemicals results improved compared to the prior year quarter due to 17% higher sales volumes in Specialty Carbons and Formulations and the successful realization of price increases across the segment. Purification Solutions EBIT was lower than the prior year quarter due to continued competitive intensity in mercury removal applications, while results in Specialty Fluids benefited from the ramp-up of projects in the Middle East and Africa.” Keohane continued, “In addition, we raised the dividend by 5% in May, repurchased shares in the amount of $43 million during the quarter and announced 300,000 metric tons of advantaged capacity additions throughout the carbon black network.”

Commenting on the outlook for the Company, Keohane said, “We are very pleased to deliver another excellent quarter, reflecting the strength of our global competitive position and we remain positive about the current business environment. Looking ahead to the fourth quarter, we anticipate that Reinforcement Materials will continue its robust performance supported by our advantaged leadership position and our strong operational and commercial execution. In Performance Chemicals, we expect to maintain margins and continued strong volumes in Specialty Carbons and Formulations, while we anticipate some impact on volumes and fixed costs in Metal Oxides due to coordinated turnarounds with two of our fumed silica feedstock providers in the quarter. Although the ongoing competitive pressures will continue to impact results in the Purification Solutions segment, we expect higher seasonal volumes in the fourth quarter to improve results sequentially. In the Specialty Fluids segment, we are expecting the continued ramp up of drilling activity on recently awarded projects to drive improved results in the fourth quarter. We continue to execute on our strategy and are poised to deliver a very successful 2018 fiscal year.”

For earnings history and earnings-related data on Cabot Corp. (CBT) click here.

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