A month has gone by since the last earnings report for Cabot (CBT Quick QuoteCBT - Free Report) . Shares have added about 11.4% 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 the most recent earnings report in order to get a better handle on the important drivers.

Cabot's Earnings and Revenues Beat Estimates in Q1

Cabot recorded first-quarter fiscal 2024 (ending Dec 31, 2023) earnings of 88 cents per share compared with the year-ago quarter's 93 cents.

CBT posted adjusted earnings of $1.56 per share, up 59.2% from the year-ago quarter figure of 98 cents. It surpassed the Zacks Consensus Estimate of $1.49.

The company’s net sales in the first quarter were $958 million, which beat the Zacks Consensus Estimate of $927.3 million. Net sales decreased around 0.7% from $965 million reported in the prior-year quarter.

Segment Highlights

Reinforcement Materials’ sales decreased around 0.3% year over year to $641 million in the reported quarter. Earnings before interest and tax (EBIT) in the segment were $129 million, up around 37.2%. The rise in EBIT was primarily driven by greater unit margins resulting from increased pricing and product mix in calendar year 2023 customer agreements, as well as higher volumes in Europe and Asia.

Sales in the Performance Chemicals unit went down roughly 0.3% year over year to $285 million in the reported quarter. EBIT increased 17.2% to $34 million, primarily due to 10% higher volumes driven by growth in the specialized carbons, specialty compounds and fumed metal oxide product lines.

Financials

The company concluded the first quarter of fiscal 2024 with a cash balance of $244 million. In the fiscal first quarter, cash flows from operating activities were $105 million. Capital expenditures for the quarter totaled $54 million. In the first quarter, cash was paid for dividends of $22 million and share repurchases of $33 million.

Outlook

Cabot stated that adjusted earnings per share for fiscal 2024 are expected to be in the $6.30 to $6.80 range, implying a rise of 22% at the midpoint compared to fiscal 2023.

The company had an encouraging start to the fiscal year, and underlying estimates about its sectors remain consistent with the previous quarter.




 

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended downward during the past month.

VGM Scores

Currently, Cabot has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. 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 belongs to the Zacks Chemical - Diversified industry. Another stock from the same industry, Dow Inc. (DOW Quick QuoteDOW - Free Report) , has gained 5.4% over the past month. More than a month has passed since the company reported results for the quarter ended December 2023.

Dow Inc. reported revenues of $10.62 billion in the last reported quarter, representing a year-over-year change of -10.4%. EPS of $0.43 for the same period compares with $0.46 a year ago.

For the current quarter, Dow Inc. is expected to post earnings of $0.47 per share, indicating a change of -19% from the year-ago quarter. The Zacks Consensus Estimate has changed -4.3% over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Dow Inc. Also, the stock has a VGM Score of B.