Cabot Corp. (CBT) Tops Q3 EPS by 9c

Cabot Corp. (NYSE: CBT) reported Q3 EPS of $0.07, $0.09 better than the analyst estimate of ($0.02). Revenue for the quarter came in at $518 million versus the consensus estimate of $549.37 million.

Commenting on the environment, Cabot President and CEO Sean Keohane, said, “Clearly the COVID-19 pandemic has had a dramatic impact on most companies and Cabot was no exception. The scale of this disruption is unprecedented, but I am proud of the way our global team has managed through the crisis. We’ve taken proactive steps to protect our employees while continuing to operate our plants to meet the dynamic needs of our customers while also carefully managing cash.”

Commenting on the company’s third quarter results, Mr. Keohane, said, “ Volumes and product mix across our businesses declined by over $100 million in the third quarter as compared to the prior year quarter driven primarily by lower demand in the tire and automotive sectors as manufacturers temporarily halted production in response to the COVID-19 pandemic. As the quarter progressed, our customers slowly restarted operations during May and June. The sequential improvement in monthly Reinforcement Materials volumes through the quarter is a positive indicator that we are exiting the quarter in a stronger position than where we started.”

Keohane continued, “Our resilient cash flows were evident again this quarter with operating cash flow of $149 million, including a benefit from net working capital of $126 million. Our balance sheet remained strong with approximately $1.4 billion in cash and committed borrowing capacity as of June 30, 2020. Out of an abundance of caution, we increased the Debt to EBITDA ratio covenant limit in our credit agreements from 3.5 to 4.5 until June 2021 in order to provide greater flexibility for accessing our committed liquidity. We continued our aggressive cost reduction efforts and are on track to deliver $60 million in cost savings in the fiscal year, which will partially mitigate the impact of lower volumes and enable the funding of in-flight growth investments for the future. On the ESG front, we announced an expanded set of 2025 sustainability goals that reinforce our broadened view of sustainability and extend beyond our strong foundation in safety, health and the environment to include areas such as product development, suppliers\' sustainability, diversity and inclusion, and community engagement.”

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

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