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Cabot (CBT) Up 6% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Cabot (CBT - Free Report) . Shares have added about 6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Cabot due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Cabot’s Q4 Earnings Beat Estimates, Revenues Miss
Cabot recorded a profit of $234 million or $4.10 per share in the fourth quarter of fiscal 2023 (ended Sep 30, 2023) compared with $94 million or $1.64 per share in the year-ago quarter.
Barring one-time items, adjusted earnings per share (EPS) were $1.65 in the reported quarter, up from $1.55 in the year-ago quarter. The figure topped the Zacks Consensus Estimate of $1.47.
Net sales fell around 13.2% year over year to $965 million in the quarter. It missed the Zacks Consensus Estimate of $1,019.9 million.
Segment Highlights
Reinforcement Materials’ sales declined around 10.9% year over year to $624 million in the reported quarter. It missed the Zacks Consensus Estimate of $670 million. This decline is a result of reduced volumes in the Americas and EMEA, which were somewhat offset by increased volumes in Asia, particularly China. Earnings of this segment increased primarily due to higher unit margins from stronger pricing and product mix in the calendar year 2023 customer agreements.
Sales in the Performance Chemicals unit went down around 9.5% year over year to $306 million in the reported quarter. It missed the Zacks Consensus Estimate of $337 million. Earnings fell primarily due to lower unit margins from a less favorable product mix in the specialty carbons and fumed metal oxides product lines, as well as pricing pressures in the fumed metal oxides and battery materials product lines.
Fiscal 2023 Results
Cabot's net income for fiscal 2023 was $445 million or $7.73 per share compared with a profit of $209 million or $3.62 per share a year ago. The adjusted EPS for fiscal 2023 was $5.38.
Net sales fell around 9% year over year to $3,931 million in fiscal 2023.
Financial Position
The company had a cash balance of $238 million at the end of the fourth quarter of fiscal 2023. Cash flows from operating activities were $138 million in the fourth quarter of fiscal 2023. Capital expenditures totaled $78 million in the reported quarter. During the fourth quarter, cash was used for dividend payments of $23 million and share repurchases of $50 million.
Outlook
Cabot expects the challenging macroeconomic situation to continue in fiscal 2024, particularly in the near term. Despite the challenging environment, the company expects adjusted EPS in the range of $6.30-$6.80 in fiscal 2024, led by sustained growth in the Reinforcement Materials unit. Furthermore, assuming stable feedstock prices, the company projects solid operating cash flow driven by strong EBITDA.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
The consensus estimate has shifted 11.29% due to these changes.
VGM Scores
Currently, Cabot has a great Growth Score of A, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. Notably, Cabot has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Cabot is part of the Zacks Chemical - Diversified industry. Over the past month, Huntsman (HUN - Free Report) , a stock from the same industry, has gained 5%. The company reported its results for the quarter ended September 2023 more than a month ago.
Huntsman reported revenues of $1.51 billion in the last reported quarter, representing a year-over-year change of -25.1%. EPS of $0.15 for the same period compares with $0.71 a year ago.
Huntsman is expected to post a loss of $0.05 per share for the current quarter, representing a year-over-year change of -225%. Over the last 30 days, the Zacks Consensus Estimate has changed -835.1%.
Huntsman has a Zacks Rank #4 (Sell) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.
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Cabot (CBT) Up 6% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Cabot (CBT - Free Report) . Shares have added about 6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Cabot due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Cabot’s Q4 Earnings Beat Estimates, Revenues Miss
Cabot recorded a profit of $234 million or $4.10 per share in the fourth quarter of fiscal 2023 (ended Sep 30, 2023) compared with $94 million or $1.64 per share in the year-ago quarter.
Barring one-time items, adjusted earnings per share (EPS) were $1.65 in the reported quarter, up from $1.55 in the year-ago quarter. The figure topped the Zacks Consensus Estimate of $1.47.
Net sales fell around 13.2% year over year to $965 million in the quarter. It missed the Zacks Consensus Estimate of $1,019.9 million.
Segment Highlights
Reinforcement Materials’ sales declined around 10.9% year over year to $624 million in the reported quarter. It missed the Zacks Consensus Estimate of $670 million. This decline is a result of reduced volumes in the Americas and EMEA, which were somewhat offset by increased volumes in Asia, particularly China. Earnings of this segment increased primarily due to higher unit margins from stronger pricing and product mix in the calendar year 2023 customer agreements.
Sales in the Performance Chemicals unit went down around 9.5% year over year to $306 million in the reported quarter. It missed the Zacks Consensus Estimate of $337 million. Earnings fell primarily due to lower unit margins from a less favorable product mix in the specialty carbons and fumed metal oxides product lines, as well as pricing pressures in the fumed metal oxides and battery materials product lines.
Fiscal 2023 Results
Cabot's net income for fiscal 2023 was $445 million or $7.73 per share compared with a profit of $209 million or $3.62 per share a year ago. The adjusted EPS for fiscal 2023 was $5.38.
Net sales fell around 9% year over year to $3,931 million in fiscal 2023.
Financial Position
The company had a cash balance of $238 million at the end of the fourth quarter of fiscal 2023. Cash flows from operating activities were $138 million in the fourth quarter of fiscal 2023. Capital expenditures totaled $78 million in the reported quarter. During the fourth quarter, cash was used for dividend payments of $23 million and share repurchases of $50 million.
Outlook
Cabot expects the challenging macroeconomic situation to continue in fiscal 2024, particularly in the near term. Despite the challenging environment, the company expects adjusted EPS in the range of $6.30-$6.80 in fiscal 2024, led by sustained growth in the Reinforcement Materials unit. Furthermore, assuming stable feedstock prices, the company projects solid operating cash flow driven by strong EBITDA.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
The consensus estimate has shifted 11.29% due to these changes.
VGM Scores
Currently, Cabot has a great Growth Score of A, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. Notably, Cabot has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Cabot is part of the Zacks Chemical - Diversified industry. Over the past month, Huntsman (HUN - Free Report) , a stock from the same industry, has gained 5%. The company reported its results for the quarter ended September 2023 more than a month ago.
Huntsman reported revenues of $1.51 billion in the last reported quarter, representing a year-over-year change of -25.1%. EPS of $0.15 for the same period compares with $0.71 a year ago.
Huntsman is expected to post a loss of $0.05 per share for the current quarter, representing a year-over-year change of -225%. Over the last 30 days, the Zacks Consensus Estimate has changed -835.1%.
Huntsman has a Zacks Rank #4 (Sell) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.