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Cabot Completes Placement of Air Emission Control Equipment

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Cabot Corporation (CBT - Free Report) recently announced a significant achievement in its project at Franklin, LA site in the United States. Management stated that the company received all its major emission control equipment and positioned the same for completion on site as of Jun 2020.

Notably, Cabot is the first carbon black manufacturer to partner with the U.S. Environmental Protection Agency (EPA) in conjunction with the national enforcement initiative of EPA to control air emissions from carbon black producing facilities.

Good news is that the project already completed 90% of the estimated person-hours needed and is on on track to finish ahead of schedule, that is, before the industry’s April 2021 EPA deadline. Per management, the company has been steadily advancing despite the problems posed by Hurricane Barry in 2019 and coronavirus in 2020. Moreover, it is leveraging its extensive expertise in applying the best-in-class pollution control technologies to ensure that proven technologies are successfully implemented in Louisiana.

Cabot is expected to reduce NOx emissions by 90% using selective catalytic control and SO2 emissions by 95% through the use of wet gas scrubbing at its Franklin site. Notably, these systems are expected to lower annual NOx and SO2 footprint by roughly 900 and 6,500 tons a year, respectively, at its Franklin site.

Shares of Cabot have lost 26.9% in the past year compared with the industry’s 18.8% decline.

On second-quarter fiscal earnings call, the company informed that it expects demand to be low in the fiscal third quarter due to the adverse impact of the pandemic.

For the Reinforcement Materials unit, the company expects a substantial fall in demand in the fiscal third quarter on account of temporary customer shutdowns in Europe and America.

In the Performance Chemicals unit, Cabot anticipates the challenging price environment for fumed silica in Europe and China to persist. Moreover, the company expects a decline in automotive demand in Europe and America to affect product mix in specialty carbons and compounds.

For the Purification Solutions unit, it expects a decrease in the quarterly EBIT on a year-over-year basis due to the coronavirus outbreak.

Zacks Rank & Stocks to Consider

The company currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the basic materials space are AngloGold Ashanti Limited (AU - Free Report) , Barrick Gold Corporation (GOLD - Free Report) and Harmony Gold Mining Company Limited (HMY - Free Report) .

AngloGold has a projected earnings growth rate of 109.9% for the current year. The company’s shares have surged around 69% in a year. It currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Barrick has a projected earnings growth rate of 54.9% for the current year. The stock has around 73% in a year. It currently has a Zacks Rank of 2.

Harmony Gold has an expected earnings growth rate of 28.6% for 2020. The company’s shares have gained 69.8% in the past year. It is presently a Zacks #2 Ranked player.

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