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Mar 31, 2020
Cabot Q2 2020 Earnings Report
Cabot delivered solid results despite the onset of the COVID-19 pandemic during the quarter.
Key Takeaways
Cabot Corporation announced its second quarter of fiscal year 2020. GAAP EPS was a loss of $0.01 and Adjusted EPS was $0.77. The company completed the acquisition of Shenzhen Sanshun Nano on April 1, 2020.
GAAP EPS was a loss of $0.01, compared to earnings of $0.39 in the prior fiscal year second quarter. Adjusted EPS of $0.77 compared to $0.99 in the prior fiscal year second quarter
Reinforcement Materials EBIT up 30% sequentially and unchanged compared to the prior fiscal year second quarter despite the negative impact from the COVID-19 pandemic
Liquidity remains strong as the company finished the quarter with cash and committed loan facilities of $1.3 billion
Acquisition of Shenzhen Sanshun Nano – a leading producer of carbon nanotubes (CNT) for lithium-ion batteries – completed on April 1, 2020
Revenue by Segment
Forward Guidance
Company expects lower demand due to the impact of the COVID-19 pandemic to continue, with a pronounced effect on fiscal third quarter results.
Positive Outlook
- Falling raw material prices
- Intense focus on working capital efficiency to provide strong operating cash flow generation.
- Reducing further our capital spending levels for the fiscal year to approximately $200 million
- Temporarily halted share repurchases
- Taken appropriate cost reduction actions to conserve cash
Challenges Ahead
- Expect a significant reduction in demand in Reinforcement Materials in the third fiscal quarter due to temporary customer shutdowns in Europe and the Americas.
- Expect product mix in specialty carbons and compounds to be negatively impacted by a decline in underlying automotive demand in Europe and the Americas
- Anticipate the challenging price environment for fumed silica in China and Europe will continue.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
Analyze how earnings announcements historically affect stock price performance
Avg. Return Before/After Earnings
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