Cabot Corp. (NYSE: CBT) reported Q1 EPS of $0.87, $0.06 worse than the analyst estimate of $0.93. Revenue for the quarter came in at $821 million versus the consensus estimate of $766.96 million.

• Solid Reinforcement Materials segment results in line with prior year
• Challenging short-term dynamics impacted volumes and margins in the Performance Chemicals segment
• Recently announced agreement to divest Specialty Fluids segment in transaction valued at $135M
• Returned $82M to shareholders through share repurchases and dividends
• Successful completion of calendar year 2019 tire customer agreements with volume and price gains in all regions

Outlook
Commenting on the outlook for the Company, Keohane said, “Despite the current business environment, we remain confident in our ability to grow earnings this fiscal year. We expect customer destocking and the impact on automotive production from new emissions regulations in Europe to have less of an impact in the second quarter of fiscal year 2019 than in the first quarter. We anticipate that Reinforcement Materials will benefit from the calendar year 2019 customer agreements, but will face headwinds in the second quarter from a challenging China environment and lower oil prices. In Performance Chemicals, we are expecting a meaningful EBIT improvement sequentially due to volume recovery in the specialty carbons and specialty compounds businesses and a positive margin impact from lower feedstock prices.”

Keohane continued, “As the forecast for auto production strengthens and the China economy improves, we anticipate stronger volumes and margins in the second half of our fiscal year. Based on the challenging first half coupled with stronger second half results, we expect full year Adjusted EPS to be in the range of $4.20 to $4.60. To counteract the business challenges, we are focused on controlling costs, tightening capital expenditure and working capital levels, delivering on recently negotiated customer agreements and managing pricing in this dynamic environment. Finally, as we continue to execute our ‘Advancing the Core’ strategy, we are committed to delivering another year of strong earnings growth, investing for the future in our core businesses, divesting non-core assets, and returning cash to our shareholders.”

GUIDANCE:

Cabot Corp. sees FY2019 EPS of $4.20-$4.60, versus the consensus of $4.61.

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