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Dec 31, 2022
Cabot Q1 2023 Earnings Report
First quarter fiscal year 2023 results were announced.
Key Takeaways
Cabot Corporation reported first quarter fiscal year 2023 results with adjusted EPS of $0.98 and diluted EPS of $0.93. The company reaffirmed its fiscal year 2023 outlook for adjusted EPS in the range of $6.25 to $6.75.
First quarter results in line with expectations; adjusted EPS of $0.98 and diluted EPS of $0.93
Reinforcement Materials segment EBIT was $94 million, up 11% compared to the same quarter in the prior year
Finalized calendar year 2023 Reinforcement Materials customer agreements above prior expectations with approximately $100 million annualized EBIT improvement expected
Battery Materials product line delivered year-over-year volume growth of 63%; recently announced plans to increase U.S. manufacturing capacity with investments over the next five years
Cabot
Cabot
Cabot Revenue by Segment
Revenue by Segment
Reinforcement Materials Revenue
CapyFin.comPerformance Chemicals Revenue
CapyFin.com Forward Guidance
The company's outlook for adjusted earnings per share for fiscal year 2023 remains in the range of $6.25 to $6.75. The outlook for discretionary free cash flow for the full fiscal year remains on track with long-term guidance of generating over $1 billion over the three-year period ending in fiscal 2024.
Positive Outlook
- Customer destocking is coming to an end as January volumes outside of China have improved from December volume levels.
- Expect a recovery in demand in China as the quarter progresses.
- Expect Reinforcement Materials to benefit from the calendar year 2023 customer agreements that went into effect in January.
- Anticipate volumes across our major product lines to improve incrementally over the course of fiscal 2023.
- Anticipate particular strength in demand for battery materials and inkjet packaging applications in the second half of the year.
Challenges Ahead
- Expect continued volume and margin impacts in the second quarter related to the COVID-19 outbreaks in China.
- Potential disruption to operations from the COVID-19 pandemic.
- Competition from other specialty chemical companies.
- Volatility in the price and availability of energy and raw materials, including with respect to the Russian invasion of Ukraine.
- Fluctuations in foreign currency exchange and interest rates.
Revenue & Expenses
Visualization of income flow from segment revenue to net income