Back to top

Image: Bigstock

Cabot Q1 Earnings Beat Estimates, Sales Down Y/Y on Lower Volumes

Read MoreHide Full Article

Key Takeaways

  • CBT posted fiscal Q1 adjusted EPS of $1.53, beating estimates, but earnings declined year over year.
  • Cabot saw Reinforcement Materials sales fall 14.9% Y/Y on lower volumes.
  • CBT narrowed FY26 EPS to $6.00-$6.50, while Performance Chemicals EBIT rose on mix and cost actions.

Cabot Corporation (CBT - Free Report) recorded first-quarter fiscal 2026 (ended Dec. 31, 2025) earnings of $1.37 per share, down from the year-ago quarter's figure of $1.67.

CBT posted adjusted earnings of $1.53 per share, down from the year-ago quarter figure of $1.76. However, adjusted earnings outpaced the Zacks Consensus Estimate of $1.40.

The company’s net sales in the quarter were $849 million, which missed the Zacks Consensus Estimate of $881.9 million. Net sales fell around 11.1% from the prior-year quarter.

Cabot Corporation Price, Consensus and EPS Surprise

Cabot Corporation Price, Consensus and EPS Surprise

Cabot Corporation price-consensus-eps-surprise-chart | Cabot Corporation Quote

CBT’s Segment Highlights

Reinforcement Materials’ sales decreased around 14.9% year over year to $520 million in the reported quarter. It missed the Zacks Consensus Estimate of $549 million. Earnings before interest and tax (EBIT) in the segment were $102 million, down around 21.54% from the year-ago quarter. The decline in EBIT was primarily due to lower volumes in the Asia Pacific and the Americas. 

In the reported quarter, sales in the Performance Chemicals division declined 3.5% year over year to $300 million. It also missed the Zacks Consensus Estimate of $304 million. EBIT witnessed an increase of approximately 6.7% to $48 million. The rise in EBIT was mainly due to a higher gross profit per ton from a favorable product mix and overall cost management and optimization efforts. This was partly offset by lower volumes due to weak demand in Europe.

CBT’s Financials

The company concluded the first quarter of fiscal 2026 with a cash balance of $230 million. During the quarter, cash flows from operating activities were $126 million. Capital expenditures for the fiscal first quarter totaled $69 million. During the fiscal first quarter, cash was also used to pay dividends of $24 million and $52 million for share repurchases. 

CBT’s Outlook

The company sees continued weakness in regional demand for Reinforcement Materials stemming from elevated Asian tire imports into Western markets. It expects a narrower adjusted EPS for the fiscal year to range between $6.00 and $6.50 compared to the previous expectation of $6.00 to $7.00. The fiscal 2026 outlook incorporates the ongoing outcome of negotiations in the tire customer agreements and competitive pressures within Reinforcement Materials.

In contrast, it expects Performance Chemicals to deliver earnings growth, supported by strength in Battery Materials and opportunities across infrastructure, alternative energy and consumer-focused applications. It also anticipates benefits from cost reductions, optimization actions and capacity rationalization.

CBT’s Price Performance

Shares of Cabot have lost 18.3% in the past year compared with the 20.3% decline of the industry

Zacks Investment Research
Image Source: Zacks Investment Research

CBT’s Zacks Rank & Key Picks

CBT currently carries a Zacks Rank #3 (Hold). 

Better-ranked stocks worth a look in the basic materials space include Albemarle Corporation (ALB - Free Report) , Coeur Mining, Inc. (CDE - Free Report)  and Avino Silver & Gold Mines Ltd. (ASM - Free Report) .

Albemarle is slated to report fourth-quarter results on Feb. 11. The Zacks Consensus Estimate for earnings is pegged at a loss of 53 cents. ALB beat the Zacks Consensus Estimate in three of the last four quarters while missing once, with the average earnings surprise being 35.28%. ALB sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here

Coeur is scheduled to report fourth-quarter results on Feb. 18. The Zacks Consensus Estimate for CDE’s fourth-quarter earnings is pegged at 33 cents. CDE beat the Zacks Consensus Estimate in three of the last two quarters and missed once, with the average earnings surprise being 106.61%. CDE currently sports a Zacks Rank #1. 

Avino Silver is slated to report fourth-quarter results on March 11. The consensus estimate for ASM’s earnings is pegged at 6 cents. ASM, carrying a Zacks Rank #2 (Buy), beat the consensus estimate in each of the last four quarters, with the average earnings surprise being 150%. 

Published in