Cabot Corp. shares fall as revenue misses, guidance disappoints

Investing.com -- Cabot Corporation (NYSE:CBT) reported mixed second-quarter results and lowered its full-year outlook, sending shares down 2.2% in after-hours trading.

The specialty chemicals and performance materials company posted adjusted earnings per share of $1.90 for the quarter ended March 31, beating analyst estimates of $1.85. However, revenue fell short of expectations, coming in at $936 million compared to the consensus estimate of $1.01 billion and down 8.1% YoY.

Cabot’s Reinforcement Materials segment, which produces rubber and specialty carbons, saw EBIT decline 12% YoY to $131 million due to lower tire demand and weaker contract outcomes in South America. Global volumes in this segment fell 7% YoY.

The Performance Chemicals segment was a bright spot, with EBIT surging 61% YoY to $50 million on higher volumes and improved profitability. The company cited stronger demand for fumed metal oxides in construction and semiconductor applications.

"I am pleased with our second quarter financial performance where we delivered Adjusted Earnings Per Share of $1.90 which was up 7% compared to the second quarter of fiscal 2024," said CEO Sean Keohane.

Looking ahead, Cabot lowered its fiscal 2025 adjusted EPS guidance to a range of $7.15 to $7.50, below the previous analyst consensus of $7.54. The company cited uncertainty around recent tariff policies and expectations for more cautious customer inventory management.

"Given the uncertain impact of recent tariff policies on customer demand in the second half of the fiscal year, we are revising our Adjusted EPS guidance for fiscal 2025," Keohane explained.

Despite the challenges, Cabot announced a 5% increase to its quarterly dividend and plans to continue share repurchases. The company ended the quarter with $213 million in cash and generated $73 million in operating cash flow.

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