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Jun 30, 2023
Cabot Q3 2023 Earnings Report
Cabot's third quarter fiscal year 2023 results were announced, featuring diluted EPS of $1.43 and adjusted EPS of $1.42.
Key Takeaways
Cabot Corporation reported its third quarter fiscal year 2023 results, which included a diluted EPS of $1.43 and an adjusted EPS of $1.42. The Reinforcement Materials segment achieved a record EBIT of $132 million, up 17% year-over-year. Strong operating cash flow of $243 million supported shareholder returns through dividends and share repurchases. However, the Performance Chemicals segment faced challenges due to weak demand.
Diluted EPS was reported at $1.43, with adjusted EPS at $1.42.
Reinforcement Materials segment achieved record EBIT of $132 million, a 17% increase year-over-year.
Operating cash flow was strong at $243 million, supporting shareholder returns.
Liquidity remained strong at approximately $1.3 billion, with Net Debt to EBITDA at 1.7 times as of June 30, 2023.
Cabot
Cabot
Cabot Revenue by Segment
Revenue by Segment
Reinforcement Materials Revenue
CapyFin.comPerformance Chemicals Revenue
CapyFin.com Forward Guidance
Cabot expects adjusted earnings per share for the fourth fiscal quarter to be in the range of $1.40 to $1.55, which would bring the full year range between $5.13 to $5.28.
Positive Outlook
- Volumes in Reinforcement Materials are expected to remain relatively consistent sequentially except for some seasonal decline in Europe.
- Strong year over year EBIT growth is expected in Reinforcement Materials, driven by the pricing and product mix benefits in calendar year 2023 customer agreements.
- Performance Chemicals segment expects relatively stable volumes sequentially across the larger product lines.
- Moderate, sequential volume improvement is anticipated in battery materials and inkjet growth vectors within the Performance Chemicals segment.
- The expected fourth quarter adjusted earnings per share exit rate range will set the company up well as it looks to fiscal 2024.
Challenges Ahead
- Pricing pressures in the EV value chain in China will impact battery materials results in the near-term.
- EBITDA results in fiscal 2023 are expected to be below the previously communicated forecast range.
- The current economic environment is weaker than expected at the beginning of the fiscal year.
- Weak demand environment.
- Increase in our operating tax rate.
Revenue & Expenses
Visualization of income flow from segment revenue to net income