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Investing.com -- Cabot Corporation (NYSE:CBT) reported fourth quarter adjusted earnings that slightly beat analyst expectations, while revenue fell short of estimates, sending shares down 5% in after-hours trading Monday. The specialty chemicals company also issued a cautious outlook for fiscal 2026, citing challenging market conditions.
The Boston-based company posted adjusted earnings per share of $1.70 for the fourth quarter, narrowly exceeding the analyst estimate of $1.68, but down 6% YoY. Revenue came in at $899 million, significantly below the consensus estimate of $962.28 million and representing a 10% decline from the $1.001 billion reported in the same quarter last year.
Cabot’s outlook for fiscal 2026 contributed to the negative market reaction, with the company projecting adjusted EPS of $6.00 to $7.00, compared to the $7.25 it achieved in fiscal 2025. The midpoint of this guidance range ($6.50) represents a potential 10% decline YoY.
"Looking ahead to fiscal 2026, we do not yet see signs of improvement in the external environment, particularly as it relates to regional demand trends in Reinforcement Materials due to the impact of elevated Asian tire imports into western regions," said Sean Keohane, Cabot President and Chief Executive Officer.
The company’s Reinforcement Materials segment, which produces carbon black for tire manufacturers, saw EBIT decrease by $4 million compared to the fourth quarter of fiscal 2024, with global volumes declining 5%. Performance Chemicals segment EBIT dropped by $2 million, with volumes down 5% primarily due to lower demand in Europe.
Despite these challenges, Cabot generated $219 million in operating cash flow during the quarter, enabling the company to return $64 million to shareholders through dividends and share repurchases.
"While market conditions remain challenging, we continue to execute on our foundation of commercial and operational excellence and we remain focused on managing costs, strengthening operations, and positioning the company for long-term growth," Keohane added.
For the full fiscal year 2025, Cabot reported adjusted EPS of $7.25, up 3% YoY, despite a challenging macroeconomic environment.
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