It has been about a month since the last earnings report for Cabot (CBT Quick QuoteCBT - Free Report) . Shares have lost about 0% in that time frame, underperforming the S&P 500.

Will the recent trend continue leading up to its next earnings release, or is Cabot due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Cabot’s Earnings and Sales Surpass Estimates in Q3

Cabot recorded third-quarter fiscal 2024 (ended Jun 30, 2024) earnings of $1.94 per share, up from the year-ago quarter's $1.43.

The company’s posted adjusted earnings of $1.92 per share, up from the year-ago quarter's figure of $1.42. Adjusted earnings beat the Zacks Consensus Estimate of $1.74.

The company’s net sales in the quarter were $1,016 million, which beat the Zacks Consensus Estimate of $1,010.1 million. Net sales increased around 4.9% from the prior-year quarter.

Segment Highlights

Reinforcement Materials’ sales increased around 4% year over year to $649 million in the reported quarter. It lagged the consensus estimate of $649.6 million. Earnings before interest and tax (EBIT) in the segment were $136 million, up around 3% from the year-ago quarter. EBIT increased primarily due to greater volumes in Europe and Asia Pacific, as well as improved price and product mix in 2024 customer agreements, which were partially offset by a less favorable regional mix and higher costs. Lower volumes in the Americas owing to weather occurrences also had a negative influence on the quarter's results.

In the reported quarter, sales in the Performance Chemicals division jumped 8.1% year over year to $332 million, surpassing the consensus estimate of $311.1 million. EBIT also witnessed a substantial increase of approximately 72% to $55 million. Performance Chemicals' EBIT in the third quarter of fiscal 2024 increased year over year, owing principally to higher volumes and a more favorable product mix. Higher volumes in the specialized carbons and fumed metal oxides product lines were mainly driven by a rise in sales to automotive, infrastructure and semiconductor markets.

Financials

The company concluded the fiscal third quarter with a cash balance of $197 million. During the reported quarter, cash flows from operating activities were $207 million. Capital expenditures totaled $52 million. During the quarter, cash was also used to pay dividends of $24 million and repurchase shares of $49 million.

Outlook

Cabot now anticipates fiscal 2024 adjusted EPS of $7.00 to $7.10. This range represents a 30 cents increase at the midpoint, driven by the company's expectations for improved results in the Performance Chemicals segment due to higher demand and a more favorable product mix compared to the first half of the year, as well as continued strong results in the Reinforcement Materials unit.

 

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended upward during the past month.

The consensus estimate has shifted 6.27% due to these changes.

VGM Scores

At this time, Cabot has a great 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 A on the value side, putting it in the top quintile 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 trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Cabot has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.

Performance of an Industry Player

Cabot belongs to the Zacks Chemical - Diversified industry. Another stock from the same industry, Methanex (MEOH Quick QuoteMEOH - Free Report) , has gained 5.5% over the past month. More than a month has passed since the company reported results for the quarter ended June 2024.

Methanex reported revenues of $920 million in the last reported quarter, representing a year-over-year change of -2.1%. EPS of $0.62 for the same period compares with $0.60 a year ago.

For the current quarter, Methanex is expected to post earnings of $0.40 per share, indicating a change of +1900% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.

Methanex has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.