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Cabot Q2 2025 Earnings Report
Cabot Corporation reported its second quarter fiscal year 2025 results, with diluted EPS of $1.69 and Adjusted EPS of $1.90.
Key Takeaways
Cabot Corporation delivered strong financial performance in the second quarter of fiscal year 2025, with Adjusted EPS increasing by 7% year-over-year. The Performance Chemicals segment showed significant growth, while Reinforcement Materials experienced a decline due to lower volumes. The company also increased its quarterly dividend and returned cash to shareholders.
Diluted EPS was $1.69 and Adjusted EPS was $1.90, representing a 7% increase in Adjusted EPS compared to the prior year.
Reinforcement Materials segment EBIT was $131 million, down 12% compared to the same quarter in the prior year.
Performance Chemicals segment EBIT was $50 million, up 61% compared to the same quarter in the prior year.
The company returned $70 million of cash to shareholders through dividends and share repurchases and increased its quarterly dividend by 5%.
Cabot
Cabot
Cabot Revenue by Segment
Revenue by Segment
Reinforcement Materials Revenue
CapyFin.comPerformance Chemicals Revenue
CapyFin.com Forward Guidance
Cabot Corporation revised its Adjusted EPS guidance for fiscal 2025 to be in the range of $7.15 to $7.50, reflecting expectations for lower demand due to recent tariff policies and cautious customer inventory levels, while maintaining strong operating cash flow and commitment to shareholder returns.
Positive Outlook
- Operating cash flow remains strong, allowing for continued investment in strategic growth projects.
- Company expects to return robust levels of cash to shareholders.
- Quarterly dividend increased by 5% from $0.43 to $0.45 per share.
- Company expects to continue to repurchase shares.
- Management is confident in its ability to adapt and execute in a dynamic environment.
Challenges Ahead
- Revised Adjusted EPS guidance for fiscal 2025 to $7.15 to $7.50.
- Uncertain impact of recent tariff policies on customer demand in the second half of the fiscal year.
- Expectations for lower demand as customers adopt a more cautious posture around inventory levels.
- Direct impact from tariffs is expected to be limited, but indirect effects on demand are anticipated.
- Outlook assumes maintaining margins similar to the second fiscal quarter, indicating no significant margin expansion.
Revenue & Expenses
Visualization of income flow from segment revenue to net income