Send me real-time posts from this site at my email
Zacks

Cabot's (CBT) Q4 Earnings Beat Estimates, Revenues Lag

Cabot Corporation CBT recorded a profit of $29 million or 50 cents per share in the fourth quarter of fiscal 2021 (ended Sep 30, 2021) against a loss of $272 million or $4.81 per share in the year-ago quarter.

Barring one-time items, adjusted earnings per share (EPS) were $1.11 in the reported quarter, up from 68 cents in the year-ago quarter. The figure topped the Zacks Consensus Estimate of $1.02.

Net sales increased 37.2% year over year to $904 million in the quarter. The metric missed the Zacks Consensus Estimate of $924.5 million.

Cabot Corporation Price, Consensus and EPS Surprise

 

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

 

Segment Highlights

Reinforcement Materials’ sales increased 51.7% year over year to $493 million in the reported quarter. Earnings before interest and tax (EBIT) in the segment were $67 million, up from $59 million in the year-ago quarter. The upside can be attributed to strong pricing in Asia and higher volumes across all regions. The segment witnessed higher volumes than the prior-year quarter’s level, which was impacted by pandemic-led shutdowns.

Sales in the Performance Chemicals unit went up around 25.7% year over year to $284 million in the reported quarter. EBIT increased 80% year over year to $45 million, due to higher pricing in its fumed silica product line and improved product mix, courtesy of higher sales in automotive and conductive applications.

Sales in Purification Solutions were stable year over year at $66 million in the quarter. EBIT in the segment was $4 million, up $4 million from the prior-year quarter’s levels. The upside in EBIT was due to higher prices in its specialty applications and reduced fixed costs resulting from the sale of its mine in Texas and the associated long-term activated carbon supply agreement.

FY21 Results

Earnings (as reported) for fiscal 2021 were $4.34 per share compared with a loss of $4.21 per share a year ago. Net sales increased around 30.4% to roughly $3,409 million.

Financial Position

Cabot had cash and cash equivalents of $168 million at the end of fiscal 2021, up 11.3% from the prior year’s level. The company’s long-term debt fell to $717 million from $1,094 million in the previous fiscal year.

Cash flow from operating activities was $100 million for the quarter, up from $99 million in the prior-year quarter.

Outlook

Cabot expects continued strong end-market demand and benefits from growth investments. It expects to benefit from higher volumes driven by strong forecasted levels of tire production and higher pricing in the Reinforcement Materials segment. In the Performance Chemicals segment, Cabot projects continued demand growth across its broad set of applications, with particular strength in battery materials and inkjet packaging.

The company also expects challenges such as rising input costs, global supply chain disruptions and the semiconductor chip shortage to moderate through the next fiscal year. The company expects adjusted EPS for fiscal 2022 in the range of $5.20-$5.60.

Price Performance

Shares of Cabot are up 36.8% in the past year compared with a 21.4% rise of the industry.

Image Source: Zacks Investment Research

Zacks Rank & Key Picks

Cabot currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the basic materials space are Nucor Corporation NUE, The Chemours Company CC and Olin Corporation OLN.

Nucor has a projected earnings growth rate of around 583.5% for the current year. The company’s shares have soared 124.5% in a year. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Chemours has an expected earnings growth rate of around 86.9% for the current year. The company’s shares have gained 41.5% in the past year. It currently carries a Zacks Rank #2 (Buy).

Olin has an expected earnings growth rate of around 740% for the current year. The stock has surged 177.4% in the past year. It currently flaunts a Zacks Rank #1.


Infrastructure Stock Boom to Sweep America

A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.

The only question is “Will you get into the right stocks early when their growth potential is greatest?”

Zacks has released a Special Report to help you do just that, and today it’s free. Discover 7 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.

Download FREE: How to Profit from Trillions on Spending for Infrastructure >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Nucor Corporation (NUE): Free Stock Analysis Report
 
Cabot Corporation (CBT): Free Stock Analysis Report
 
Olin Corporation (OLN): Free Stock Analysis Report
 
The Chemours Company (CC): Free Stock Analysis Report
 
To read this article on Zacks.com click here.

Welcome! Is it your First time here?

What are you looking for? Select your points of interest to improve your first-time experience:

Apply & Continue