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Cabot's (CBT) Q2 Earnings and Revenues Surpass Estimates
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Cabot Corporation (CBT - Free Report) recorded a profit of $107 million or $1.84 per share in the second quarter of fiscal 2022 (ended Mar 31, 2022) compared with $75 million or $1.30 per share in the year-ago quarter.
Barring one-time items, adjusted earnings per share were $1.69 in the reported quarter, up from $1.38 in the year-ago quarter. The figure topped the Zacks Consensus Estimate of $1.40.
Net sales increased 29.7% year over year to $1,092 million in the quarter. The metric beat the Zacks Consensus Estimate of $919 million. The company witnessed strength in volumes and favorable pricing in the Reinforcement Materials segment. Its Performance Chemicals unit also gained from price increases across all regions.
Cabot Corporation Price, Consensus and EPS Surprise
Reinforcement Materials’ sales increased 44.5% year over year to $627 million in the reported quarter. Earnings before interest and tax (EBIT) in the segment were $101 million, up from $89 million in the year-ago quarter. The upside can be attributed to improved unit margins from higher pricing in the calendar year 2022 customer agreements and higher volumes across all regions.
Sales in the Performance Chemicals unit went up around 22.4% year over year to $360 million in the reported quarter. EBIT increased 20.7% year over year to $70 million mainly due to higher unit margins, driven by price increases and product mix in the specialty carbons and fumed metal oxides product lines.
Sales in Purification Solutions declined 42.5% year over year to $36 million in the quarter.
Financial Position
Cabot had cash and cash equivalents of $215 million at the end of the second quarter, up 47.3% from the prior-year quarter’s level. The company’s long-term debt fell to $711 million from $1,087 million in the prior-year quarter.
Capital expenditures for the second quarter were $41 million.
Cash flow from operating activities was $10 million for the quarter, down from $65 million in the prior-year quarter.
Outlook
Cabot stated that it is well positioned to deliver record adjusted earnings per share for the fiscal year. Factoring in its strong first-half results and expectations for the second half of fiscal 2022, it raised its adjusted earnings per share outlook for the fiscal year by 30 cents at the midpoint to a new range of $5.80-$6.20.
Its ability to deliver exceptional results in both segments reflects the strength of the portfolio, the agility and strong execution of its teams and the value customers place on Cabot’s product offerings. These factors and growth investments position it well for fiscal 2022 and the coming years, the company noted.
Price Performance
Shares of Cabot are up 10.1% in the past year against a 4.7% decline of the industry.
Image Source: Zacks Investment Research
Zacks Rank & Other Key Picks
Cabot currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the basic materials space are Nutrien Ltd. (NTR - Free Report) , AdvanSix Inc. (ASIX - Free Report) and Allegheny Technologies Incorporated (ATI - Free Report) .
Nutrien has a projected earnings growth rate of 139.9% for the current year. The Zacks Consensus Estimate for NTR's current-year earnings has been revised 30.1% upward in the past 60 days.
Nutrien’s earnings beat the Zacks Consensus Estimate in three of the last four quarters, while missing once. It delivered a trailing four-quarter earnings surprise of roughly 5.9%, on average. NTR has rallied around 68.6% in a year and currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
AdvanSix has a projected earnings growth rate of 63.4% for the current year. The Zacks Consensus Estimate for ASIX’s current-year earnings has been revised 39.4% upward in the past 60 days.
AdvanSix’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, the average being 23.6%. ASIX has surged 48.3% in a year. The company carries a Zacks Rank #1.
Allegheny, currently sporting a Zacks Rank #1, has an expected earnings growth rate of 707.7% for the current year. The Zacks Consensus Estimate for ATI's earnings for the current year has been revised 6.1% upward in the past 60 days.
Allegheny’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 127.2%. ATI has rallied around 10.2% over a year.
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Cabot's (CBT) Q2 Earnings and Revenues Surpass Estimates
Cabot Corporation (CBT - Free Report) recorded a profit of $107 million or $1.84 per share in the second quarter of fiscal 2022 (ended Mar 31, 2022) compared with $75 million or $1.30 per share in the year-ago quarter.
Barring one-time items, adjusted earnings per share were $1.69 in the reported quarter, up from $1.38 in the year-ago quarter. The figure topped the Zacks Consensus Estimate of $1.40.
Net sales increased 29.7% year over year to $1,092 million in the quarter. The metric beat the Zacks Consensus Estimate of $919 million. The company witnessed strength in volumes and favorable pricing in the Reinforcement Materials segment. Its Performance Chemicals unit also gained from price increases across all regions.
Cabot Corporation Price, Consensus and EPS Surprise
Cabot Corporation price-consensus-eps-surprise-chart | Cabot Corporation Quote
Segment Highlights
Reinforcement Materials’ sales increased 44.5% year over year to $627 million in the reported quarter. Earnings before interest and tax (EBIT) in the segment were $101 million, up from $89 million in the year-ago quarter. The upside can be attributed to improved unit margins from higher pricing in the calendar year 2022 customer agreements and higher volumes across all regions.
Sales in the Performance Chemicals unit went up around 22.4% year over year to $360 million in the reported quarter. EBIT increased 20.7% year over year to $70 million mainly due to higher unit margins, driven by price increases and product mix in the specialty carbons and fumed metal oxides product lines.
Sales in Purification Solutions declined 42.5% year over year to $36 million in the quarter.
Financial Position
Cabot had cash and cash equivalents of $215 million at the end of the second quarter, up 47.3% from the prior-year quarter’s level. The company’s long-term debt fell to $711 million from $1,087 million in the prior-year quarter.
Capital expenditures for the second quarter were $41 million.
Cash flow from operating activities was $10 million for the quarter, down from $65 million in the prior-year quarter.
Outlook
Cabot stated that it is well positioned to deliver record adjusted earnings per share for the fiscal year. Factoring in its strong first-half results and expectations for the second half of fiscal 2022, it raised its adjusted earnings per share outlook for the fiscal year by 30 cents at the midpoint to a new range of $5.80-$6.20.
Its ability to deliver exceptional results in both segments reflects the strength of the portfolio, the agility and strong execution of its teams and the value customers place on Cabot’s product offerings. These factors and growth investments position it well for fiscal 2022 and the coming years, the company noted.
Price Performance
Shares of Cabot are up 10.1% in the past year against a 4.7% decline of the industry.
Image Source: Zacks Investment Research
Zacks Rank & Other Key Picks
Cabot currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the basic materials space are Nutrien Ltd. (NTR - Free Report) , AdvanSix Inc. (ASIX - Free Report) and Allegheny Technologies Incorporated (ATI - Free Report) .
Nutrien has a projected earnings growth rate of 139.9% for the current year. The Zacks Consensus Estimate for NTR's current-year earnings has been revised 30.1% upward in the past 60 days.
Nutrien’s earnings beat the Zacks Consensus Estimate in three of the last four quarters, while missing once. It delivered a trailing four-quarter earnings surprise of roughly 5.9%, on average. NTR has rallied around 68.6% in a year and currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
AdvanSix has a projected earnings growth rate of 63.4% for the current year. The Zacks Consensus Estimate for ASIX’s current-year earnings has been revised 39.4% upward in the past 60 days.
AdvanSix’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, the average being 23.6%. ASIX has surged 48.3% in a year. The company carries a Zacks Rank #1.
Allegheny, currently sporting a Zacks Rank #1, has an expected earnings growth rate of 707.7% for the current year. The Zacks Consensus Estimate for ATI's earnings for the current year has been revised 6.1% upward in the past 60 days.
Allegheny’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 127.2%. ATI has rallied around 10.2% over a year.