We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Cabot Q4 Earnings Beat on Performance Chemicals Strength
Read MoreHide Full Article
Key Takeaways
Cabot's adjusted Q4 EPS of $1.61 topped estimates of $1.55, while revenues rose 12.2%.
Performance Chemicals EBIT jumped 42.9% on higher volumes and stronger gross profit per ton.
Reinforcement Materials EBIT fell 26.9% as lower gross profit per ton offset volume gains.
Cabot Corporation (CBT - Free Report) reported adjusted earnings of $1.61 per share for the fourth quarter of fiscal 2026 (ended Sept. 30, 2026), down 5.3% from $1.70 a year ago. The figure surpassed the Zacks Consensus Estimate of $1.55 by 3.9%.
On a reported basis, earnings were $1.25 per share for the reported quarter, compared with 79 cents a year earlier.
Revenues rose 12.2% year over year to $1.009 billion, beating the consensus mark of $943 million by 7%. Higher volumes and gross profit per ton lifted Performance Chemicals results, while Reinforcement Materials faced pricing and mix pressures despite a 5% increase in global volumes.
Cabot Corporation Price, Consensus and EPS Surprise
Reinforcement Materials sales grew 12.6% year over year to $634 million from $563 million. Segment earnings before interest and taxes (EBIT), however, declined 26.9% to $87 million from $119 million. Lower gross profit per ton more than offset the benefit of increased volumes.
The profitability decline reflected the terms of calendar 2026 customer agreements and a less favorable regional product mix. Volumes increased 10% in Asia Pacific and 3% in the Americas, supported in part by capacity added in Indonesia and an acquisition in Mexico. Volumes in Europe, the Middle East and Africa fell 7%.
Performance Chemicals sales increased 10.4% year over year to $340 million from $308 million. Segment EBIT climbed 42.9% to $60 million from $42 million, reflecting both stronger gross profit per ton and higher volumes.
A favorable product mix and lower costs supported per-ton profitability. Volumes rose in the battery materials and specialty carbons product lines compared with the year-ago quarter. The segment's EBITDA totaled $83 million, with an EBITDA margin of 24%, underscoring its contribution to quarterly operating performance.
Cabot's Cash Generation and Liquidity
Cash provided by operating activities totaled $143 million in the quarter, compared with $219 million in the prior-year period. Capital expenditures were $55 million, bringing free cash flow to $88 million. The company also paid $25 million in dividends and repurchased $45 million of shares in the reported quarter.
Cabot ended fiscal 2026 with $254 million in cash and cash equivalents and $1.5 billion in available liquidity. Its net debt-to-EBITDA ratio stood at 1.4 times. Working capital increased by $10 million during the quarter, reflecting higher raw material costs. Discretionary free cash flow totaled $117 million.
Cabot Sets Fiscal 2027 Earnings Outlook
For fiscal 2027, Cabot expects adjusted earnings of $6.15-$6.75 per share. Management anticipates further volume growth in battery materials and electronics, as well as from strategic customer accounts, while seeking to maintain solid margins amid volatile energy costs and competitive pressures.
The company plans to complete previously announced restructuring actions, optimize operations and invest in yield-improvement technology. It expects an operating tax rate of 28-30% for fiscal 2027. Management also emphasized continued operating cash generation, growth investment and shareholder returns under its balanced capital allocation approach.
CBT’s Price Performance
CBT’s shares have increased 18.7% over a year compared with the 23.3% growth recorded by the Zacks Chemicals Diversified industry.
Image Source: Zacks Investment Research
CBT’s Zacks Rank & Key Picks
CBT currently carries a Zacks Rank #5 (Strong Sell).
Better-ranked stocks in the basic materials space include McEwen Inc. (MUX - Free Report) , GrowGeneration Corp. (GRWG - Free Report) and NioCorp Developments Ltd. (NB - Free Report) .
GrowGeneration is scheduled to report third-quarter results on Nov. 10. The consensus estimate for GRWG’s earnings is pegged at a penny per share. GRWG currently carries a Zacks Rank #2.
NioCorp is slated to report quarterly results on Nov. 16. The Zacks Consensus Estimate for NB’s earnings is pegged at a loss of 3 cents. NB sports a Zacks Rank #1 at present.
View the Zacks #1 Rank List
Image: Bigstock
Cabot Q4 Earnings Beat on Performance Chemicals Strength
Key Takeaways
Cabot Corporation (CBT - Free Report) reported adjusted earnings of $1.61 per share for the fourth quarter of fiscal 2026 (ended Sept. 30, 2026), down 5.3% from $1.70 a year ago. The figure surpassed the Zacks Consensus Estimate of $1.55 by 3.9%.
On a reported basis, earnings were $1.25 per share for the reported quarter, compared with 79 cents a year earlier.
Revenues rose 12.2% year over year to $1.009 billion, beating the consensus mark of $943 million by 7%. Higher volumes and gross profit per ton lifted Performance Chemicals results, while Reinforcement Materials faced pricing and mix pressures despite a 5% increase in global volumes.
Cabot Corporation Price, Consensus and EPS Surprise
Cabot Corporation price-consensus-eps-surprise-chart | Cabot Corporation Quote
CBT's Segmental Highlights
Reinforcement Materials sales grew 12.6% year over year to $634 million from $563 million. Segment earnings before interest and taxes (EBIT), however, declined 26.9% to $87 million from $119 million. Lower gross profit per ton more than offset the benefit of increased volumes.
The profitability decline reflected the terms of calendar 2026 customer agreements and a less favorable regional product mix. Volumes increased 10% in Asia Pacific and 3% in the Americas, supported in part by capacity added in Indonesia and an acquisition in Mexico. Volumes in Europe, the Middle East and Africa fell 7%.
Performance Chemicals sales increased 10.4% year over year to $340 million from $308 million. Segment EBIT climbed 42.9% to $60 million from $42 million, reflecting both stronger gross profit per ton and higher volumes.
A favorable product mix and lower costs supported per-ton profitability. Volumes rose in the battery materials and specialty carbons product lines compared with the year-ago quarter. The segment's EBITDA totaled $83 million, with an EBITDA margin of 24%, underscoring its contribution to quarterly operating performance.
Cabot's Cash Generation and Liquidity
Cash provided by operating activities totaled $143 million in the quarter, compared with $219 million in the prior-year period. Capital expenditures were $55 million, bringing free cash flow to $88 million. The company also paid $25 million in dividends and repurchased $45 million of shares in the reported quarter.
Cabot ended fiscal 2026 with $254 million in cash and cash equivalents and $1.5 billion in available liquidity. Its net debt-to-EBITDA ratio stood at 1.4 times. Working capital increased by $10 million during the quarter, reflecting higher raw material costs. Discretionary free cash flow totaled $117 million.
Cabot Sets Fiscal 2027 Earnings Outlook
For fiscal 2027, Cabot expects adjusted earnings of $6.15-$6.75 per share. Management anticipates further volume growth in battery materials and electronics, as well as from strategic customer accounts, while seeking to maintain solid margins amid volatile energy costs and competitive pressures.
The company plans to complete previously announced restructuring actions, optimize operations and invest in yield-improvement technology. It expects an operating tax rate of 28-30% for fiscal 2027. Management also emphasized continued operating cash generation, growth investment and shareholder returns under its balanced capital allocation approach.
CBT’s Price Performance
CBT’s shares have increased 18.7% over a year compared with the 23.3% growth recorded by the Zacks Chemicals Diversified industry.
Image Source: Zacks Investment Research
CBT’s Zacks Rank & Key Picks
CBT currently carries a Zacks Rank #5 (Strong Sell).
Better-ranked stocks in the basic materials space include McEwen Inc. (MUX - Free Report) , GrowGeneration Corp. (GRWG - Free Report) and NioCorp Developments Ltd. (NB - Free Report) .
McEwen is slated to report third-quarter results on Nov. 9. The Zacks Consensus Estimate for earnings is pegged at 9 cents per share. MUX carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
GrowGeneration is scheduled to report third-quarter results on Nov. 10. The consensus estimate for GRWG’s earnings is pegged at a penny per share. GRWG currently carries a Zacks Rank #2.
NioCorp is slated to report quarterly results on Nov. 16. The Zacks Consensus Estimate for NB’s earnings is pegged at a loss of 3 cents. NB sports a Zacks Rank #1 at present.