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Why Is Cabot (CBT) Up 2% Since Last Earnings Report?
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A month has gone by since the last earnings report for Cabot (CBT - Free Report) . Shares have added about 2% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Cabot due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Cabot's Earnings and Sales Surpass Estimates in Q4
Cabot recorded a profit of $94 million or $1.64 per share in the fourth quarter of fiscal 2022 (ended Sep 30, 2022) compared with $29 million or 50 cents per share in the year-ago quarter.
Barring one-time items, adjusted earnings per share were $1.55 in the reported quarter, up from $1.11 in the year-ago quarter. The figure topped the Zacks Consensus Estimate of $1.48.
Net sales increased around 23% year over year to $1,112 million in the quarter. It beat the Zacks Consensus Estimate of $1,037.7 million.
The company’s results were aided by higher margins and stronger volumes. Battery Materials delivered strong growth in the quarter.
Segment Highlights
Reinforcement Materials’ sales increased around 42% year over year to $700 million in the reported quarter. Earnings before interest and tax (EBIT) in the segment were $109 million, up around 63% from 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 19% year over year to $338 million in the reported quarter. EBIT increased around 9% year over year to $49 million mainly due to increased volumes and higher unit margins, driven by price increases and better product mix in the specialty carbons and fumed metal oxides product lines.
Fiscal 2022 Results
Profit (as reported) or full-year fiscal 2022 was $209 million or $3.62 per share, compared with $250 million or $4.34 per share a year ago. Revenues were $4.3 billion for the fiscal, up around 27% year over year.
Financial Position
Cabot had cash and cash equivalents of $206 million at the end of the fiscal, up around 23% year over year. The company’s long-term debt was $1,089 million, up around 52% year over year.
Capital expenditures for the reported quarter were $90 million.
Cash flow from operating activities was $105 million for the quarter.
Outlook
Cabot sees adjusted earnings per share for fiscal 2023 in the band of $6.25-$6.75 factoring in strength in the Reinforcement Materials segment and above-market growth in Battery Materials. The company also expects strong operating cash flow driven by solid EBITDA and its expectation for moderating feedstock costs.
For Reinforcement Materials, the company sees stable volumes along with higher pricing in its 2023 calendar year customer agreements to drive year-over-year growth in segment EBIT in fiscal 2023. For Performance Chemicals, it expects volumes in Battery Materials growth vector to rise more than 50% year-over-year with EBITDA in the band of $45-$50 million. In the other businesses within Performance Chemicals, it envisions results to be impacted in the first half of fiscal 2023 due to weaker demand, especially in Europe.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -40.96% due to these changes.
VGM Scores
Currently, Cabot has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Cabot has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
Cabot is part of the Zacks Chemical - Diversified industry. Over the past month, Eastman Chemical (EMN - Free Report) , a stock from the same industry, has gained 3.5%. The company reported its results for the quarter ended September 2022 more than a month ago.
Eastman Chemical reported revenues of $2.71 billion in the last reported quarter, representing a year-over-year change of -0.4%. EPS of $2.05 for the same period compares with $2.46 a year ago.
For the current quarter, Eastman Chemical is expected to post earnings of $1.41 per share, indicating a change of -22.1% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.9% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #4 (Sell) for Eastman Chemical. Also, the stock has a VGM Score of C.
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Why Is Cabot (CBT) Up 2% Since Last Earnings Report?
A month has gone by since the last earnings report for Cabot (CBT - Free Report) . Shares have added about 2% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Cabot due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Cabot's Earnings and Sales Surpass Estimates in Q4
Cabot recorded a profit of $94 million or $1.64 per share in the fourth quarter of fiscal 2022 (ended Sep 30, 2022) compared with $29 million or 50 cents per share in the year-ago quarter.
Barring one-time items, adjusted earnings per share were $1.55 in the reported quarter, up from $1.11 in the year-ago quarter. The figure topped the Zacks Consensus Estimate of $1.48.
Net sales increased around 23% year over year to $1,112 million in the quarter. It beat the Zacks Consensus Estimate of $1,037.7 million.
The company’s results were aided by higher margins and stronger volumes. Battery Materials delivered strong growth in the quarter.
Segment Highlights
Reinforcement Materials’ sales increased around 42% year over year to $700 million in the reported quarter. Earnings before interest and tax (EBIT) in the segment were $109 million, up around 63% from 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 19% year over year to $338 million in the reported quarter. EBIT increased around 9% year over year to $49 million mainly due to increased volumes and higher unit margins, driven by price increases and better product mix in the specialty carbons and fumed metal oxides product lines.
Fiscal 2022 Results
Profit (as reported) or full-year fiscal 2022 was $209 million or $3.62 per share, compared with $250 million or $4.34 per share a year ago. Revenues were $4.3 billion for the fiscal, up around 27% year over year.
Financial Position
Cabot had cash and cash equivalents of $206 million at the end of the fiscal, up around 23% year over year. The company’s long-term debt was $1,089 million, up around 52% year over year.
Capital expenditures for the reported quarter were $90 million.
Cash flow from operating activities was $105 million for the quarter.
Outlook
Cabot sees adjusted earnings per share for fiscal 2023 in the band of $6.25-$6.75 factoring in strength in the Reinforcement Materials segment and above-market growth in Battery Materials. The company also expects strong operating cash flow driven by solid EBITDA and its expectation for moderating feedstock costs.
For Reinforcement Materials, the company sees stable volumes along with higher pricing in its 2023 calendar year customer agreements to drive year-over-year growth in segment EBIT in fiscal 2023. For Performance Chemicals, it expects volumes in Battery Materials growth vector to rise more than 50% year-over-year with EBITDA in the band of $45-$50 million. In the other businesses within Performance Chemicals, it envisions results to be impacted in the first half of fiscal 2023 due to weaker demand, especially in Europe.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -40.96% due to these changes.
VGM Scores
Currently, Cabot has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Cabot has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
Cabot is part of the Zacks Chemical - Diversified industry. Over the past month, Eastman Chemical (EMN - Free Report) , a stock from the same industry, has gained 3.5%. The company reported its results for the quarter ended September 2022 more than a month ago.
Eastman Chemical reported revenues of $2.71 billion in the last reported quarter, representing a year-over-year change of -0.4%. EPS of $2.05 for the same period compares with $2.46 a year ago.
For the current quarter, Eastman Chemical is expected to post earnings of $1.41 per share, indicating a change of -22.1% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.9% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #4 (Sell) for Eastman Chemical. Also, the stock has a VGM Score of C.