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Cabot's (CBT) Q4 Earnings Beat Estimates, Revenues Lag
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Cabot Corporation (CBT - Free Report) recorded a profit of $29 million or 50 cents per share in the fourth quarter of fiscal 2021 (ended Sep 30, 2021) against a loss of $272 million or $4.81 per share in the year-ago quarter.
Barring one-time items, adjusted earnings per share (EPS) were $1.11 in the reported quarter, up from 68 cents in the year-ago quarter. The figure topped the Zacks Consensus Estimate of $1.02.
Net sales increased 37.2% year over year to $904 million in the quarter. The metric missed the Zacks Consensus Estimate of $924.5 million.
Cabot Corporation Price, Consensus and EPS Surprise
Reinforcement Materials’ sales increased 51.7% year over year to $493 million in the reported quarter. Earnings before interest and tax (EBIT) in the segment were $67 million, up from $59 million in the year-ago quarter. The upside can be attributed to strong pricing in Asia and higher volumes across all regions. The segment witnessed higher volumes than the prior-year quarter’s level, which was impacted by pandemic-led shutdowns.
Sales in the Performance Chemicals unit went up around 25.7% year over year to $284 million in the reported quarter. EBIT increased 80% year over year to $45 million, due to higher pricing in its fumed silica product line and improved product mix, courtesy of higher sales in automotive and conductive applications.
Sales in Purification Solutions were stable year over year at $66 million in the quarter. EBIT in the segment was $4 million, up $4 million from the prior-year quarter’s levels. The upside in EBIT was due to higher prices in its specialty applications and reduced fixed costs resulting from the sale of its mine in Texas and the associated long-term activated carbon supply agreement.
FY21 Results
Earnings (as reported) for fiscal 2021 were $4.34 per share compared with a loss of $4.21 per share a year ago. Net sales increased around 30.4% to roughly $3,409 million.
Financial Position
Cabot had cash and cash equivalents of $168 million at the end of fiscal 2021, up 11.3% from the prior year’s level. The company’s long-term debt fell to $717 million from $1,094 million in the previous fiscal year.
Cash flow from operating activities was $100 million for the quarter, up from $99 million in the prior-year quarter.
Outlook
Cabot expects continued strong end-market demand and benefits from growth investments. It expects to benefit from higher volumes driven by strong forecasted levels of tire production and higher pricing in the Reinforcement Materials segment. In the Performance Chemicals segment, Cabot projects continued demand growth across its broad set of applications, with particular strength in battery materials and inkjet packaging.
The company also expects challenges such as rising input costs, global supply chain disruptions and the semiconductor chip shortage to moderate through the next fiscal year. The company expects adjusted EPS for fiscal 2022 in the range of $5.20-$5.60.
Price Performance
Shares of Cabot are up 36.8% in the past year compared with a 21.4% rise of the industry.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
Cabot currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the basic materials space are Nucor Corporation (NUE - Free Report) , The Chemours Company (CC - Free Report) and Olin Corporation (OLN - Free Report) .
Nucor has a projected earnings growth rate of around 583.5% for the current year. The company’s shares have soared 124.5% in a year. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Chemours has an expected earnings growth rate of around 86.9% for the current year. The company’s shares have gained 41.5% in the past year. It currently carries a Zacks Rank #2 (Buy).
Olin has an expected earnings growth rate of around 740% for the current year. The stock has surged 177.4% in the past year. It currently flaunts a Zacks Rank #1.
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Cabot's (CBT) Q4 Earnings Beat Estimates, Revenues Lag
Cabot Corporation (CBT - Free Report) recorded a profit of $29 million or 50 cents per share in the fourth quarter of fiscal 2021 (ended Sep 30, 2021) against a loss of $272 million or $4.81 per share in the year-ago quarter.
Barring one-time items, adjusted earnings per share (EPS) were $1.11 in the reported quarter, up from 68 cents in the year-ago quarter. The figure topped the Zacks Consensus Estimate of $1.02.
Net sales increased 37.2% year over year to $904 million in the quarter. The metric missed the Zacks Consensus Estimate of $924.5 million.
Cabot Corporation Price, Consensus and EPS Surprise
Cabot Corporation price-consensus-eps-surprise-chart | Cabot Corporation Quote
Segment Highlights
Reinforcement Materials’ sales increased 51.7% year over year to $493 million in the reported quarter. Earnings before interest and tax (EBIT) in the segment were $67 million, up from $59 million in the year-ago quarter. The upside can be attributed to strong pricing in Asia and higher volumes across all regions. The segment witnessed higher volumes than the prior-year quarter’s level, which was impacted by pandemic-led shutdowns.
Sales in the Performance Chemicals unit went up around 25.7% year over year to $284 million in the reported quarter. EBIT increased 80% year over year to $45 million, due to higher pricing in its fumed silica product line and improved product mix, courtesy of higher sales in automotive and conductive applications.
Sales in Purification Solutions were stable year over year at $66 million in the quarter. EBIT in the segment was $4 million, up $4 million from the prior-year quarter’s levels. The upside in EBIT was due to higher prices in its specialty applications and reduced fixed costs resulting from the sale of its mine in Texas and the associated long-term activated carbon supply agreement.
FY21 Results
Earnings (as reported) for fiscal 2021 were $4.34 per share compared with a loss of $4.21 per share a year ago. Net sales increased around 30.4% to roughly $3,409 million.
Financial Position
Cabot had cash and cash equivalents of $168 million at the end of fiscal 2021, up 11.3% from the prior year’s level. The company’s long-term debt fell to $717 million from $1,094 million in the previous fiscal year.
Cash flow from operating activities was $100 million for the quarter, up from $99 million in the prior-year quarter.
Outlook
Cabot expects continued strong end-market demand and benefits from growth investments. It expects to benefit from higher volumes driven by strong forecasted levels of tire production and higher pricing in the Reinforcement Materials segment. In the Performance Chemicals segment, Cabot projects continued demand growth across its broad set of applications, with particular strength in battery materials and inkjet packaging.
The company also expects challenges such as rising input costs, global supply chain disruptions and the semiconductor chip shortage to moderate through the next fiscal year. The company expects adjusted EPS for fiscal 2022 in the range of $5.20-$5.60.
Price Performance
Shares of Cabot are up 36.8% in the past year compared with a 21.4% rise of the industry.
Zacks Rank & Key Picks
Cabot currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the basic materials space are Nucor Corporation (NUE - Free Report) , The Chemours Company (CC - Free Report) and Olin Corporation (OLN - Free Report) .
Nucor has a projected earnings growth rate of around 583.5% for the current year. The company’s shares have soared 124.5% in a year. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Chemours has an expected earnings growth rate of around 86.9% for the current year. The company’s shares have gained 41.5% in the past year. It currently carries a Zacks Rank #2 (Buy).
Olin has an expected earnings growth rate of around 740% for the current year. The stock has surged 177.4% in the past year. It currently flaunts a Zacks Rank #1.