Cabot Corporation (NYSE:CBT) recorded net earnings (attributable to shareholders) of $45 million or 71 cents per share for the third quarter of fiscal 2017 (ended Jun 30, 2017) compared with $56 million or 88 cents recorded a year ago.
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Barring one-time items, the adjusted earnings for the reported quarter were 81 cents per share, missing the Zacks Consensus Estimate of 85 cents.
Revenues increased around 13.5% year over year to $705 million in the reported quarter. Sales beat the Zacks Consensus Estimate of $661 million.
Cabot Corporation Price, Consensus and EPS Surprise
Segment Highlights
Reinforcement Materials sales in the reported quarter rose 36% year over year to $367 million.
Sales from the Performance Chemicals remained almost flat year over year at $229 million in the reported quarter.
Sales from the Purification Solutions fell 7.8% year over year to $71 million.
Sales from the Specialty Fluids fell to $12 million in the reported quarter from $19 million reported in the year-ago quarter.
Financial Position
Cabot Corp. ended the fiscal third quarter with cash and cash equivalents of $198 million.
The company’s long-term debt was $665 million as of Jun 30, 2017.
Cash provided by operating activities were around $132 million for the fiscal third quarter.
Outlook
Cabot Corp. believes that Reinforcement Materials segment will continue to impress, although the company is expected to see modestly higher fixed costs in the fourth quarter. The end markets in Performance Chemicals are anticipated to remain strong and the segment’s volumes and product mix are expected to improve with the resolution of the unplanned downtime. Purification Solutions is expected to gain from seasonal volume growth and lower fixed costs in the fourth quarter. The company remains focused on delivering shareholder value by growing annual adjusted earnings per share by 7–10% over time.
Price Performance
Cabot Corp.’s shares fell around 4% over the last three months, underperforming the industry’s 1.8% gain.
Zacks Rank & Key Picks
Cabot Corp. currently carries a Zacks Rank #4 (Sell).
Some better-ranked companies in the chemical space include Akzo Nobel N.V. (OTC:AKZOY) , BASF SE (OTC:BASFY) and Hitachi Chemical HCHMY. All three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Akzo Nobel has an expected long-term earnings growth of 11.1%.
BASF has an expected long-term earnings growth of 8.6%.
Hitachi Chemical has an expected long-term earnings growth of 5%.
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