CBT

It has been about a month since the last earnings report for Cabot (CBT). Shares have lost about 1.6% in that time frame, underperforming the S&P 500. Will the recent negative trend continue leading up to its next earnings release, or is Cabot due for a breakout? Well, first let's take a quick look at its latest earnings report in order to get a better handle on the recent drivers for Cabot Corporation before we dive into how investors and analysts have reacted as of late. Cabot posted third-quarter fiscal 2026 (ended June 30, 2026) adjusted earnings of $1.67 per share, down 12.1% year over year but ahead of the Zacks Consensus Estimate of $1.66. Revenues increased 6.4% year over year to $982 million and surpassed the consensus mark of $914.5 million by 7.4%. Performance Chemicals delivered stronger profitability, supported by higher volumes and gross profit per ton, while Reinforcement Materials faced pressure from lower gross profit per ton. Reinforcement Materials sales increased 4.5% year over year to $599 million from $573 million. It beat the Zacks Consensus Estimate of $543 million. Segment EBIT declined to $97 million from $128 million in the prior-year period. The decrease primarily reflected lower gross profit per ton due to the outcomes of calendar 2026 customer agreements, partially offset by higher volumes and a more favorable regional product mix. Reinforcement Materials volumes increased 5% globally. Asia Pacific volumes rose 10%, and Americas volumes increased 4%, while Europe, Middle East and Africa volumes declined 4%. Growth also benefited from additional capacity in Indonesia and the company's acquisition in Mexico. Performance Chemicals sales advanced 9.7% year over year to $351 million from $320 million. It surpassed the Zacks Consensus Estimate of $339 million. Segment EBIT increased to $68 million from $57 million, supported by higher volumes and increased gross profit per ton. Battery materials volumes benefited from stronger demand for electric vehicles and battery energy storage systems, as well as increased participation with leading global battery manufacturers. Fumed metal oxides volumes rose on growth in electronics applications. Higher gross profit per ton reflected price increases implemented ahead of rising raw material costs and a favorable product mix. Cabot exited the third quarter of fiscal 2026 with cash and cash equivalents of $250 million. Cash provided by operating activities totaled $75 million during the quarter. Capital expenditures were $38 million, while dividend payments totaled $24 million. The company ended the quarter with $1.3 billion of available liquidity and a net debt-to-EBITDA ratio of 1.4 times as of June 30, 2026. Free cash flow was $37 million, while discretionary free cash flow totaled $91 million. For fiscal 2026, Cabot tightened its adjusted earnings guidance to $6.15-$6.45 per share from the previous range of $6-$6.5. The company expects its full-year fiscal 2026 operating tax rate to be in the range of 28-30%. Cabot also reaffirmed its expectation of approximately $40 million of EBITDA from its battery materials product line for fiscal 2026. The company is expanding global conductive additive capacity through targeted investments in the United States and China to support expected growth in global battery demand and broaden its participation with leading battery manufacturers. It turns out, estimates revision have trended upward during the past month. The consensus estimate has shifted 6.12% due to these changes. At this time, Cabot has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the second quintile for value investors. Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in. Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Interestingly, Cabot has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months. Cabot belongs to the Zacks Chemical - Diversified industry. Another stock from the same industry, LyondellBasell (LYB), has gained 6.6% over the past month. More than a month has passed since the company reported results for the quarter ended June 2026. LyondellBasell reported revenues of $9.18 billion in the last reported quarter, representing a year-over-year change of +19.8%. EPS of $4.30 for the same period compares with $0.62 a year ago. For the current quarter, LyondellBasell is expected to post earnings of $2.46 per share, indicating a change of +143.6% from the year-ago quarter. The Zacks Consensus Estimate has changed -6.8% over the last 30 days. LyondellBasell has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Cabot Corporation (CBT) : Free Stock Analysis Report LyondellBasell Industries N.V. (LYB) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Image source: The Motley Fool. Tuesday, Aug. 4, 2026 at 8:00 a.m. ET Investor Relations - Robert Rist CEO and President - Sean Keohane Executive Vice President and CFO - Erica McLaughlin Operator: Good day, and thank you for standing by. Welcome to Cabot Corporation's Earnings Teleconference for Third Quarter Fiscal 2026. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the call over to your first speaker today, Mr. Robert Rist. Thank you. Please go ahead. Robert Rist: Thank you, Desmond. Good morning. I'd like to welcome you to Cabot Corporation's earnings teleconference. With me today are Sean Keohane, CEO and President; and Erica McLaughlin, Executive Vice President and CFO. Last night, we released results for our third quarter of fiscal 2026, copies of which are posted in the Investor Relations section of our website. The slide deck that accompanies this call is also available in the Investor Relations portion of our website and will be available in conjunction with the replay of this call. During this conference call, we will make forward-looking statements about our expected future operational and financial performance. Each forward-looking statement is subject to risks and uncertainties that could cause actual results to differ materially from those projected in such statements. Additional information regarding these factors appears under the heading Forward-Looking Statements in the press release we issued last night and in our annual report on Form 10-K for the fiscal year ending September 30, 2025, and in subsequent filings we make with the SEC, all of which are available on the company's website. In order to provide greater transparency regarding our operating performance, we refer to certain non-GAAP financial measures that involve adjustments to GAAP results. Any non-GAAP financial measure presented should not be considered to be an alternative to a financial measure required by GAAP. Any non-GAAP financial measure referenced on this call are reconciled to the most directly comparable GAAP financial measure in a table at the end of our earnings release issued last night and available in the Investors section on our website. I will now turn the call over to Sean, who will discuss the third quarter highlights, followed by several company and business updates. Erica will review the third quarter financial highlights and the business segment results. Following this, Sean will provide closing comments on our fiscal 2026 outlook and then open the floor to questions. Sean? Sean Keohane: Thank you, Rob. Good morning, ladies and gentlemen, and welcome to our call today. Before we begin our review of the quarter, I'd like to briefly address the leadership transition announced last week. After nearly 25 years with Cabot, including the last 10 years as President and CEO, I have decided to retire effective at the end of the fiscal year on September 30, 2026. To support a smooth transition, I will continue in an advisory capacity through the end of the calendar year. My decision to retire reflects a thoughtful and well-planned succession process in partnership with our Board of Directors. Leading Cabot has been the privilege of my professional career, and I am incredibly proud of what we have accomplished. During my tenure as President and CEO, we have strengthened our portfolio, significantly increased our business segment profitability, incubated and scaled our battery materials product line into a leading position, executed a consistent disciplined approach to capital allocation and focused relentlessly on creating value for our shareholders. While my decision is naturally based on personal considerations, I also believe it comes at an appropriate time for the company. Cabot is operating from a position of strength. We have a clear strategy, a strong balance sheet, an experienced leadership team and significant opportunities ahead to grow. I am thrilled by the Board's appointment of Erica McLaughlin as Cabot's next President and CEO. Having worked in partnership with Erica for many years, including during her most recent tenure as Chief Financial Officer and Head of Corporate Strategy, I have seen firsthand her ability to drive results, shape strategy and lead through complexity. Many of you already know Erica well through her role as CFO and her previous experience leading Investor Relations. Prior to her appointment as CFO, Erica was Vice President of Business Operations for our Reinforcement Materials segment and General Manager of our Tire business. Erica understands our businesses and how they operate and has been my partner in driving a culture of disciplined execution. She has been deeply involved in shaping and executing our strategy, and she brings a strong track record of operational, financial and strategic leadership. I'm confident she is the right leader to guide Cabot through its next phase of growth and value creation. With that, I'll turn it over to Erica. Erica McLaughlin: Thank you, Sean. I'm honored by the Board's confidence and excited to lead Cabot into its next chapter. Having spent nearly 25 years with the company, including most recently serving as CFO and Head of Corporate Strategy, I've had the privilege of helping to shape many of the strategic priorities that are driving our businesses today. As Cabot's President and CEO, I will remain focused on continuing to deliver long-term shareholder value. I believe that Cabot is exceptionally well positioned as we enter this next chapter for the company. We have strong businesses with leading market positions, a healthy balance sheet, a proven operating model and an experienced leadership team. Our priorities remain unchanged: continue delivering strong performance in our core businesses, advance our growth initiatives, invest in innovation, maintain disciplined capital allocation and pursue opportunities that enhance long-term value creation. As part of this transition, we have initiated a search for our next CFO to identify the best leader to support the company's continued growth and execution and who will continue to build upon Cabot's strong track record of financial discipline. We are also fortunate to have a strong and experienced finance and accounting organization with deep expertise, and I am confident in the team's ability to partner closely with me and the executive leadership team throughout the transition. I also want to thank Sean for his leadership, partnership and unwavering commitment to the company. His leadership has helped shape the company we are today, and I'm grateful to have had the opportunity to work alongside him through much of the journey. As we look ahead, I'm excited about the opportunities in front of us and confident in our ability to build on the strong foundation that Sean has established. I look forward to leading Cabot through this next chapter and continuing to create long-term value for our shareholders. With that, I'll turn it back to Sean to discuss the third quarter results. Sean Keohane: Thanks, Erica. I am pleased with our third quarter performance as we continue to execute well in a market environment that remains dynamic, delivering adjusted earnings per share of $1.67, an increase of 4% sequentially. Our results reflect solid execution by our team. Our Reinforcement Materials segment delivered EBIT of $97 million in the quarter despite challenging market conditions and pricing headwinds from our 2026 annual tire customer agreements. In Performance Chemicals, we delivered another strong quarter with segment EBIT of $68 million, up 19% year-over-year. These results demonstrate the strength of the business and the effectiveness of the actions we have taken to drive profitable growth across the portfolio. Despite the impact of sharply higher oil on our working capital balances, cash generation was robust in the quarter as we generated $75 million of cash flow from operations. Consistent with our balanced capital allocation framework, we returned $24 million to shareholders through dividends and invested $38 million in capital expenditures, including projects to advance strategic growth opportunities. During the quarter, we also received an important sustainability recognition, having earned a Platinum sustainability rating from EcoVadis for the sixth consecutive year. EcoVadis is the world's largest and most trusted provider of business sustainability ratings, assessing more than 150,000 companies globally. Achieving Platinum status, the highest level of recognition, places Cabot among the top 1% of companies in the basic chemicals manufacturing category. This recognition reflects our continued commitment to transparency and responsible business practices while providing our customers and other stakeholders with an independent validation and clear visibility into our sustainability performance. While the operating environment remains challenging with ongoing geopolitical tensions in the Middle East, continued volatility in energy and raw material costs and mixed demand conditions across many of our end markets, our teams have remained focused on disciplined execution. We have continued to adapt to changing market conditions, support our customers and advance the strategic initiatives that we believe are important to our long-term growth. Progress in areas such as battery materials, network optimization and cost improvement initiatives highlight our ability to remain focused on what we can control while navigating an environment that remains dynamic. Overall, I'm encouraged by our performance in the quarter and remain confident in our ability to execute through the current environment while continuing to strengthen Cabot's competitive position for the future. As I have previously discussed, battery materials is an important part of Cabot's growth strategy, fueled by strong underlying market momentum. We are rapidly scaling our business and excited about our progress and its long-term value creation potential. I believe that the long-term fundamentals of the battery market are highly attractive. Batteries are fast becoming a critical catalyst of the modern energy economy. They are an essential component of energy grid stability and serve to enable the decoupling of energy generation from energy consumption. Batteries are part of the backbone of the digital revolution, providing the physical assurance layer for data centers and AI infrastructure where power reliability is key. And they are enabling the transition of mobility and are a foundational technology for emerging applications like drones and robotics. Global battery demand is expected to more than double by the end of the decade, driven by continued growth in electric vehicles, expanding adoption of battery energy storage systems and emerging applications that require increasingly sophisticated battery technologies. Importantly, our opportunity extends beyond electric vehicles. Today, approximately 30% of battery demand is derived from non-EV applications, particularly energy storage, which continues to be one of the fastest-growing segments of the market. Given our leadership positions across electric vehicles, battery energy storage systems and other advanced battery applications, we believe Cabot is uniquely positioned to capitalize on this broad-based growth. Operationally, the business continues to perform very well. I am excited about our continued momentum in Battery Materials this fiscal year, and we are reaffirming our expectation of approximately $40 million of EBITDA in fiscal 2026. The product line continues to generate attractive earnings with trailing 12-month EBITDA margins of approximately 24% as of the end of Q3. Performance has been driven by strong execution of existing customer programs, increasing penetration in energy storage applications and the benefit of capacity that is now available to support growing customer demand. During the quarter, we also advanced a program to expand global conductive additive capacity within our Battery Materials product line through targeted investments in both the United States and China. These investments reflect our confidence in the long-term growth opportunities we see in advanced batteries and enhance our broad global manufacturing footprint, which we view as one of our key competitive strengths. Today, Cabot produces conductive additives for battery applications across all major geographies, including the United States, Europe and China, allowing us to support customers as they increasingly localize battery production and establish new gigafactories in Western markets. This geographic reach enables us to serve global customers where they operate while providing the supply chain flexibility and regional support that are becoming increasingly important. In addition, our broad range of conductive carbons, carbon nanotubes, carbon nanostructures, blends and dispersions allows us to develop tailored solutions that meet the diverse and demanding requirements of battery manufacturers and help optimize battery performance across a wide range of applications. As part of this effort, we have redefined our U.S. expansion plans from the previously contemplated greenfield facility in Michigan to capacity additions at 2 existing U.S. manufacturing sites. Given evolving electric vehicle market conditions and growing demand for battery energy storage systems, we believe this brownfield approach provides the most flexible and capital-efficient way to support customer growth and synchronize the timing of new capacity additions to match our customer start-up dates. In total, we expect to invest approximately $125 million in these capacity additions with new capacity anticipated to come online in 2028. This allocation of growth CapEx is already contemplated in our total CapEx envelope that we are currently operating in. Taken together, our global manufacturing footprint, broad technology portfolio, proven customer relationships and targeted capacity investments position us well to support the evolving needs of battery manufacturers around the world. We believe these advantages will allow us to win in this application and capture long-term growth of advanced batteries, making battery materials an increasingly meaningful contributor to shareholder value creation over time. I will now turn it over to Erica to discuss the financial and performance results of the quarter in more detail. Erica? Erica McLaughlin: Thanks, Sean. Adjusted earnings per share for the third quarter of fiscal 2026 was $1.67. This performance was driven by strength in our Performance Chemicals segment, partially offset by lower year-over-year earnings in Reinforcement Materials. Overall, our results reflect solid execution across the portfolio and were in line with our expectations for the quarter. We generated $75 million of operating cash flow while funding approximately $44 million of higher net working capital associated with rapidly rising raw material costs. We also invested $38 million in capital expenditures to support our asset base and strategic growth initiatives while returning $24 million to shareholders through dividends. While we did not repurchase shares in the third quarter, we have repurchased $101 million thus far during the fiscal year and expect to be back in the market to repurchase shares in the fourth quarter. We ended the quarter with $250 million of cash and cash equivalents, and our liquidity position remains strong at approximately $1.3 billion. Our debt balance was approximately $1.3 billion, and our net debt-to-EBITDA ratio was 1.4x as of June 30. In the fourth quarter, we expect to refinance our public bond, which matures in September. This is consistent with our disciplined approach to liquidity management and our focus on preserving strong financial flexibility. Our year-to-date operating tax rate was 29%, and we are updating our expected fiscal 2026 operating tax rate range to 28% to 30%. The modest increase in the forecasted range reflects changes in our expected geographic mix of earnings for the fiscal year. Turning to capital expenditures. As I mentioned, during the quarter, we spent $38 million. As we continue to carefully manage capital deployment and align spending with project timing, we are narrowing our expected fiscal 2026 capital expenditure range to $200 million to $215 million, reducing the high end of the range by $15 million. This updated forecast continues to support the investments we believe are required to maintain our global asset base and advance our key growth initiatives, including battery materials. Overall, our balance sheet remains in excellent position, and our cash generation continues to be strong, which supports both strategic growth and cash return to shareholders. Now moving to Reinforcement Materials. During the third quarter of fiscal 2026, EBIT for Reinforcement Materials was $97 million compared to $128 million in the prior year quarter. EBITDA was $117 million and EBITDA margin was 20%. The year-over-year decline in earnings was primarily driven by lower gross profit per ton resulting from the outcomes of our calendar year 2026 customer agreements. These impacts were partially offset by higher volumes and a more favorable regional product mix. Global volumes increased 5% year-over-year, driven by higher volumes in both Asia Pacific and the Americas. Asia Pacific volumes increased 10%, while Americas volumes were up 4%, benefiting from continued ramp of our capacity addition in Indonesia and contributions from our recently acquired asset in Mexico. While pricing pressure from our annual contracts continues to impact year-over-year comparisons, the business continues to execute well in a challenging environment. Our team remains focused on operational performance, leveraging our process technology expertise, customer engagement and executing the restructuring and other cost actions we have announced that are designed to enhance the business' competitiveness and profitability over the long term. Looking to the fourth quarter, we expect a modest sequential decline in EBIT. This outlook is primarily driven by our expectation for lower seasonal demand and less favorable regional product mix, particularly in Europe. Now turning to Performance Chemicals. Performance Chemicals delivered a strong quarter and continued to build on the momentum we have seen throughout fiscal 2026. Segment EBIT increased by $11 million year-over-year, driven by both higher volumes and higher gross profit per ton. Volume growth was led by battery materials, driven by continued growth in electric vehicle and battery energy storage applications as well as our strengthening participation with the market-leading global battery manufacturers. We continue to benefit from our differentiated product portfolio, strong customer relationships and our ability to support customers globally as they scale production. We also delivered strong volume growth in our fumed metal oxides product line, where volumes increased due to higher demand in electronics-related applications. Gross profit per ton improved compared to the prior year, driven by a combination of a favorable product mix and pricing actions implemented ahead of rising raw material costs. These pricing actions reflect the agility of our commercial teams and their ability to proactively manage changing cost dynamics. As we look to the fourth quarter, we expect lower seasonal volumes and our gross profit per ton to normalize as raw material costs are expected to catch up to the pricing actions we implemented in the third quarter. I will now turn it back to Sean to discuss our outlook and closing remarks. Sean? Sean Keohane: Given the year-to-date performance and our expectations for the fourth quarter, we are tightening our fiscal 2026 adjusted earnings per share guidance range from $6 to $6.50 per share to $6.15 to $6.45 per share. There are several assumptions embedded across our guidance range, including expectations for energy prices, raw material costs and customer demand levels as we conclude the year. The guidance range reflects different demand and cost scenarios given the ongoing geopolitical uncertainty and recent volatility in oil-related prices. Despite these near-term dynamics, I believe that the underlying fundamentals of our portfolio remain healthy, and we continue to focus on those applications where there are strong tailwinds. Infrastructure applications such as wire and cable are currently experiencing record order backlogs driven by grid renewal, alternative energy growth and power demand from the AI super cycle. This, in turn, is driving demand for our conductive carbons and compounds. Electronics applications, particularly semiconductors, are also experiencing robust AI-driven demand, which is resulting in strong growth of fumed silica for the CMP application. And finally, we continue to see strong momentum in battery materials, driven by growth of electric vehicles, battery energy storage systems and emerging industrial applications such as drones and robots. Our operating platform of commercial excellence and operational excellence underpins our approach and track record of disciplined execution. And in these turbulent geopolitical times, we expect to continue to execute asset optimization actions to drive efficiency and to support our customers' dynamic supply chain requirements. Our teams remain focused on effectively managing the factors within our control, and this rigor has supported our results this year. Looking beyond fiscal 2026, we expect to continue to invest in attractive growth opportunities such as battery materials, advance operational improvement initiatives and optimize our manufacturing network to strengthen our competitive position and support long-term value creation. At the same time, we remain committed to a balanced capital allocation framework, maintaining our world-class asset base, funding high confidence growth projects and returning cash to shareholders through dividends and share repurchases while preserving balance sheet strength and financial flexibility. As we discussed earlier, I believe the company also enters this next chapter from a position of strength. The recently announced leadership transition reflects a thoughtful succession planning process and provides continuity in both our strategy and execution. Erica has been deeply involved in shaping the strategic direction of the company and driving many of the initiatives that are contributing to our performance today. I'm confident the company is well positioned to build on its momentum and continue executing its long-term strategy. In closing, while the operating environment remains dynamic, I believe Cabot is well positioned to deliver a strong finish to fiscal 2026 and continue creating long-term value for shareholders. Thank you very much for joining us today, and I will now turn the call back over for our question-and-answer session. Operator: [Operator Instructions] The first question comes from the line of John Roberts of Mizuho Securities. John Ezekiel Roberts: I don't envy the Specialty Blacks team in handling pricing right now in this oil environment. Is the plan to hold price on Specialty Blacks until oil settles down? Or how are you thinking about the bandwidth within which oil moves in your pricing actions? Sean Keohane: We've worked together for a long time. You've covered Cabot for a long time, and I've really enjoyed that, and I know you'll enjoy continuing that with Erica, but thank you very much for that. In terms of the Specialty Carbons pricing dynamic, you're right. I mean, with oil volatility right now, that remains a top priority to manage that. This, of course, is something we've done for a very long time and do really well. And you can certainly see in Q3 that as oil moved very quickly, our teams executed in a very disciplined way and got pricing into the right place to reflect the higher oil prices. So as we move forward, we would expect margins to normalize in Q4 as the higher raws catch up. with the pricing. That said, the environment is very, very dynamic. And so we remain on guard here and make sure that we're moving appropriately to manage pricing as oil moves. The primary way that we price in this market, of course, is based on value delivered in application. But that said, we have to respond to these dynamic raw material movements. And again, I think we have established a strong track record of doing that. So we'd expect the strong margins in this segment to continue, and we'd expect that we'd continue to drive favorable product mix as we're focusing in areas that have really strong tailwinds. John Ezekiel Roberts: And then in the battery area, are your growth investments keeping up with the industry growth? Are you planning to expand ahead of industry growth here? Maybe talk a little bit about your share within what's going on inside the industry? Sean Keohane: Yes, sure. So obviously, batteries is a top priority for us and really central to the overall company's growth strategy. And we think we're really well positioned here given the breadth of our portfolio, the only player in the world that has the breadth of conductive additive offerings and an ability to tailor blends and dispersions of those. So we think the product portfolio is uniquely positioned. And then our global footprint as customers are increasingly building gigafactories in the West. and looking for regional supply and supply chain security, we think our global footprint really positions us very well. I think one of the key things that we have been striving to do and doing successfully is to manage capacity additions so that we synchronize with our customers' timing as they're starting up their gigafactories. And I think we've been really successful at doing just that. And more recently, we've been growing above the market rate, and we would have expectations that we continue to perform at that level. We think our product offering and regional asset base really positions us well to support customers. So the timing of these will come online to allow us to continue this trend that we're currently demonstrating. Operator: Our next question comes from the line of Laurence Alexander of Jefferies LLC. Daniel Rizzo: This is Dan Rizzo on for Laurence. In terms of your Reinforcement Materials, I know that the headwind from tire imports was lessening or seem to be lessening. I wonder if that trend is continuing and what we should expect or we can expect some normalization at the end of the year here and into the next fiscal year? Sean Keohane: Yes. So maybe a couple of comments. Obviously, the tire import dynamic is an important one, but one that has been quite dynamic. And so maybe a couple of updates since our last call on that front. The first I would say is that we're encouraged by the EU's decision to implement antidumping duties on Chinese tire imports. Recently, you might have tracked that announcement. And while there's a range of antidumping duties, most of the companies fall inside the range of 24% to 45% antidumping duty. And there are additional countervailing duties measures that could materially increase that total duty burden. And the expectation is that provisional measures on the countervailing duties are possibly going to be announced by August, so this month. with an expectation of definitive measures by later in the year, December. So that is, I think, directionally positive for the European tire industry and something that we think over time would be a positive development. If you look at the level of tire imports into the EU on a year-to-date basis through April, they're down 16% as compared to the same period in 2025. So directionally positive. And so we'll have to see how these developments play out, but certainly a positive one. On the North America front, tire imports are down about 3% on a year-to-date basis through April, again, same period and down about 2% into the U.S. specifically. So again, trend is encouraging and supportive of market fundamentals. So pleased to see that, but obviously a dynamic situation. Daniel Rizzo: And just shifting over to batteries, which we talked about a bit. Is there a certain end market like EVs versus data storage that uses more of your products versus -- and at a higher margin? Or is it kind of universal? I mean you said you kind of tailor things specifically, but I was wondering if there's a specific subsegment that is more -- is better, I guess, for lack of a better word. Sean Keohane: Yes. So obviously, there are a range of different applications in the battery market from EVs to battery energy storage to then emerging industrial applications like drones and robotics. And in each side of -- inside each of those applications, there are many different sub applications and customers that are targeting different parts of the market. So I would say the performance requirements and the range inside there, it differs substantially. And so I think that really fits the breadth of our product portfolio really well. So in certain cases, people may [Technical Difficulty] Operator: Pardon for the interruption. The speaker has technical issues, please remain on hold. The conference will resume shortly. [Audio Gap] Ladies and gentleman, the speak is experiencing some technical difficulties. The conference will resume shortly. Please remain on hold. Sean Keohane: Sorry, we are back now. Operator: Please continue. Sean Keohane: Hello? Robert Rist: Yes, Sean. Hello? We can hear you. Sean Keohane: Desmond can you hear us? Operator: Yes, we can hear you. Apologies. The speakers will be disconnecting shortly. Please remain on hold. Thank you for your patience. [Audio Gap] I believe we have the speaker connected. Please continue. Sean Keohane: Desmond, apologies, folks, for that line getting cut off there. Hopefully, you can hear me okay now. Desmond, I assume you'll jump in if there's any difficulty in the transmission here. Let me just come back. I'm not sure exactly where I got cut off on Dan's question around battery materials and are we targeting? Are there differences across applications? And are we targeting in certain areas? Just a very quick recap on that. So obviously, there are many different applications inside of batteries from EVs to battery energy storage to emerging industrial applications like drones and robots. And then inside each of those applications, there are different chemistries from LFP to NCM technologies and then emerging things like semi-solid state and dry process and things like that. In each of those chemistries, in every single one, conductive additives are required. So at a real basic level, I would say we're agnostic from a demand level. But of course, each one of those has a different performance requirement that customers are looking to tailor to. And this is where we believe the breadth of our conductive additives portfolio really positions us well to tailor solutions for customers. So if they're looking for fast charge performance and to accent that dimension of performance more, then we would tailor a package for that. If range, for example, is more important, then we're in a position to adjust. So it really depends, but the breadth of the portfolio really allows us to, to meet the customer requirements in each case. Daniel Rizzo: Okay. And then my final question is, just so within Performance Chemicals, so battery is obviously doing extremely well. It's going to drive a lot of growth. You said wire and cable is okay, but that would suggest that kind of the rest of the portfolio is still somewhat lackluster and not really showing signs of improvement. Am I thinking about that correctly? Sean Keohane: I would say not entirely, Dan. I think a couple of things I would highlight here. So overall, we're expecting in this segment that volumes would grow low single digits this year. But if you look at a normalized environment, we would expect this portfolio to grow at sort of 1.5 to 2x GDP. That would be the right long-range way to think about it. Now as we're sitting here today, there are some end markets in this segment that are experiencing headwinds. I would put automotive OE production in that category. I'd certainly put housing and construction in that category. On the counterbalancing side of all of that, certainly, infrastructure remains very strong. So wire and cable, as you referenced, the electronics space, in particular, anything related to AI, data centers, semiconductors, that is quite strong and then battery materials. So I would say there's a sort of a difference across the breadth of this portfolio, some very, very strong tailwinds, some headwinds. But when you balance it all out, we would expect low single-digit growth this year. And on a normalized basis, you'd expect somewhere around 1.5 to 2x GDP as the growth rate for the basket of applications. Operator: [Operator Instructions] Our next question comes from the line of David Begleiter from Deutsche Bank. Emily Fusco: This is Emily Fusco on for David Begleiter. Do you have any early look at Battery Materials, maybe sales and EBITDA growth in fiscal '27? Or just any extra color you can provide there? Sean Keohane: Yes, sure. So obviously, very pleased with the way the business is developing here. And I think you can see in our results that it's scaling up very rapidly. I think the first thing I'd point you to is just the growth expectations. The growth expectations in this market are -- it's expected to double by the end of this decade and a very strong compound annual growth rate. And so our expectations are certainly greater than that. But I think if you just look at the growth rate of this market, it's expected to be quite strong. So I think there's measure of confidence and visibility around that, particularly as you see the emergence of battery energy storage supporting the whole AI super cycle here and then use cases around drones, robotics, things like that, that are really kind of emerging right in front of our eyes here. So I think strong growth fundamentals and most of the forecasters of this -- in this market space are pretty well aligned about the expectations here for strong growth through the end of the decade, and we would certainly expect to participate in that and have aspirations to do better than that. Operator: [Operator Instructions] The next question comes from the line of Pete Osterland from Truist Securities. Pete Osterland: So first, I just wanted to start on volume growth in Reinforcement Materials, just given that the numbers by region include the acquisition in Mexico and the expansion in Indonesia. Could you size what organic demand growth looked like in the Americas and Asia in fiscal third quarter ex those expansions? And looking into the fourth quarter, what are you seeing in your order books? Are overall demand dynamics largely stable? Sean Keohane: Pete -- and welcome and appreciate you picking up coverage of Cabot and look forward to continuing the relationship. In terms of demand expectations or maybe the look back first, let me talk a little bit about it by region. So certainly, in the Americas, the favorable volume comparison that we reported in the Americas was driven by a number of different factors. Our new asset in Mexico contributed to the year-over-year growth. And we also saw higher what we would call base business volumes compared to the prior year third quarter. So taken together, these resulted in a 4% increase in the Americas volumes versus the prior year with contribution up year-over-year from, obviously, the Mexico acquisition, but also in our base business. And as you think about going forward here into the fourth quarter, we normally experience some seasonality in this quarter. And so that's reflected in our outlook. But I would say the demand environment remains as expected with that normal seasonality embedded in it. And then in terms of Asia Pacific, certainly some benefit from the new capacity in Indonesia, which is enabling us to better serve customer demand in that region. So we had strong performance from a volume standpoint in Asia in the quarter, up about 10% across the whole Asia region. Part of that is Indonesia, part of it is underlying demand. And then part of it is the year-over-year benefited from comparison to, I would say, a particularly weak quarter in the third quarter of fiscal '25, so last year in China. So taken together, certainly a strong quarter in terms of volume. And again, I think other than normal seasonality expectations, I would say things are sort of developing as expected. Pete Osterland: Very helpful. And then just as a follow-up, switching over to the Battery Materials capacity expansion. If the market growth for battery products is what you expect, how many incremental years of growth are these expansions intended to size your capacity for? I guess when would you have to look towards the next phase of expansion as this high-growth market continues to grow? Sean Keohane: Yes. Yes. And so important question here. And I think a couple of things, Pete, that have been important kind of hallmarks of how we're thinking about capacity. One is that our global network of assets really gives us a lot of optionality in order to expand capacity and try to synchronize that with our customers' expansions. And this is actually quite important, and there have been many cases, I'm sure you've seen in this battery space where companies get out over their skis on capacity too far ahead of demand developing. And in our case, we've been really trying to pay close attention to that so that we support our customers, but do it in a way that's best synchronized and the global asset base really allows us a lot of optionality to do that. As we roll through the projects that I outlined here, those will come on at some point in 2028. And I think as a rough number, you might think about that probably supports our growth expectations for about 3 years, something like that. And between now and then, of course, we'll be developing the next wave of expansion options across our global network as we see how the market develops. But that's maybe a rough way to think about it. Operator: [Operator Instructions] Our next question comes from Josh Spector of UBS. Christopher Perrella: It's Chris Perrella on for Josh. Sean and Erica, best of luck in the new roles and then the next step there. I had a question on the capital spending. On a longer-term basis, how much -- can you kind of calibrate where you should be? I know this is within the existing envelope. But how should we think about CapEx over the next couple of years? And is the Michigan project then off and the DOE grant then not no longer applicable? Erica McLaughlin: Chris, so I can say for the capital, I think probably similar levels to what we've been spending if you look forward, would be appropriate. This would include the growth initiatives that we would spend on as well as maintenance type capital and compliance type capital. So I think that's how I would think about it. As we said in the prepared remarks, we've adjusted the plans from the announcement of the new plant in Michigan to adjust where we're expanding capacity to existing U.S. plants to meet the expectations for growth in batteries. And so as it relates to the DOE, I'd say we continue to be in discussions with the DOE regarding our potential grant that we announced in 2024, and we'd be able to expect to update you on this when we have concluded those discussions. Christopher Perrella: Okay. That's helpful. And then A follow-up question on Performance Chems. Is there an underlying mix shift along with the seasonality in the fiscal fourth quarter? And does that impact the unit margin as well? Or are we just -- is it just the catch-up on the raw material cost or the raw material costs catching up to the price increases you took? Erica McLaughlin: Yes. I'd say it's primarily the latter, Chris. So the roll-through of the cost aligning with the prices would normalize the margin. And there is normal sequential seasonality, as you know, moving into the summer months here. So I'd say there could be minor mix impacts there, but the predominant factor moving Q3 to Q4 is the raw material cost flow through. Operator: At this time, there are no further questions from the line. I would like to hand the call back to the management for closing. Sean Keohane: Great. Well, thank you. Thanks very much, Desmond, and thank you all for joining the call today and for your continued support of Cabot Corporation. And again, as I begin plans for retirement here and handing over the company to Erica, I'm thrilled with the position that we're in here. And I want to also thank you for your support over the years and look forward to a bright future for Cabot under Erica's leadership. Thank you very much. Operator: That does conclude today's conference call. Thank you for your participation. You may now disconnect your lines. Before you buy stock in Cabot, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Cabot wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $399,832!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,374,595!* That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of August 10, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Cabot (CBT) Q3 2026 Earnings Call Transcript was originally published by The Motley Fool

Cabot Corporation CBT posted third-quarter fiscal 2026 (ended June 30, 2026) adjusted earnings of $1.67 per share, down 12.1% year over year but ahead of the Zacks Consensus Estimate of $1.66. Revenues increased 6.4% year over year to $982 million and surpassed the consensus mark of $914.5 million by 7.4%. Performance Chemicals delivered stronger profitability, supported by higher volumes and gross profit per ton, while Reinforcement Materials faced pressure from lower gross profit per ton. Cabot Corporation price-consensus-eps-surprise-chart | Cabot Corporation Quote Reinforcement Materials sales increased 4.5% year over year to $599 million from $573 million. It beat the Zacks Consensus Estimate of $543 million. Segment EBIT declined to $97 million from $128 million in the prior-year period. The decrease primarily reflected lower gross profit per ton due to the outcomes of calendar 2026 customer agreements, partially offset by higher volumes and a more favorable regional product mix. Reinforcement Materials volumes increased 5% globally. Asia Pacific volumes rose 10%, and Americas volumes increased 4%, while Europe, Middle East and Africa volumes declined 4%. Growth also benefited from additional capacity in Indonesia and the company's acquisition in Mexico. Performance Chemicals sales advanced 9.7% year over year to $351 million from $320 million. It surpassed the Zacks Consensus Estimate of $339 million. Segment EBIT increased to $68 million from $57 million, supported by higher volumes and increased gross profit per ton. Battery materials volumes benefited from stronger demand for electric vehicles and battery energy storage systems, as well as increased participation with leading global battery manufacturers. Fumed metal oxides volumes rose on growth in electronics applications. Higher gross profit per ton reflected price increases implemented ahead of rising raw material costs and a favorable product mix. Cabot exited the third quarter of fiscal 2026 with cash and cash equivalents of $250 million. Cash provided by operating activities totaled $75 million during the quarter. Capital expenditures were $38 million, while dividend payments totaled $24 million. The company ended the quarter with $1.3 billion of available liquidity and a net debt-to-EBITDA ratio of 1.4 times as of June 30, 2026. Free cash flow was $37 million, while discretionary free cash flow totaled $91 million. For fiscal 2026, Cabot tightened its adjusted earnings guidance to $6.15-$6.45 per share from the previous range of $6-$6.5. The company expects its full-year fiscal 2026 operating tax rate to be in the range of 28-30%. Cabot also reaffirmed its expectation of approximately $40 million of EBITDA from its battery materials product line for fiscal 2026. The company is expanding global conductive additive capacity through targeted investments in the United States and China to support expected growth in global battery demand and broaden its participation with leading battery manufacturers. Shares of Cabot have gained 15.6% in the past year compared with the 9.6% rise of the industry. Image Source: Zacks Investment Research CBT currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks are Neo Performance Materials Inc. NOPMF,ClearSign Technologies Corporation CLIR and Applied Industrial Technologies, Inc. AIT Neo Performance is slated to report second-quarter 2026 results on Aug. 11. The Zacks Consensus Estimate for earnings is pegged at 50 cents per share. NOPMF sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here. ClearSign is expected to report second-quarter 2026 results on Aug. 19. The consensus estimate for CLIR’s loss per share is pegged at 25 cents. CLIR presently carries a Zacks Rank #2 (Buy). Applied Industrial is expected to report fourth-quarter 2026 results on Aug. 13. The Zacks Consensus Estimate for AIT’s fourth-quarter earnings per share is pegged at $2.92. AIT carries a Zacks Rank #2 at present. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Cabot Corporation (CBT) : Free Stock Analysis Report Applied Industrial Technologies, Inc. (AIT) : Free Stock Analysis Report ClearSign Technologies Corporation (CLIR) : Free Stock Analysis Report Neo Performance Materials Inc. (NOPMF) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

This article first appeared on GuruFocus. Adjusted EPS: $1.67 for the third quarter of fiscal 2026, an increase of 4% sequentially. Reinforcement Materials EBIT: $97 million in the quarter, down from $128 million in the prior year quarter. Performance Chemicals EBIT: $68 million, up 19% year over year. Cash Flow from Operations: $75 million generated in the quarter. Capital Expenditures: $38 million invested in the quarter. Shareholder Returns: $24 million returned to shareholders through dividends in the quarter. Share Repurchases: $101 million repurchased year-to-date; no shares repurchased in the third quarter. Cash and Cash Equivalents: $250 million at the end of the quarter. Net Debt-to-EBITDA Ratio: 1.4 times as of June 30. Operating Tax Rate: 29% year-to-date; fiscal 2026 expected range updated to 28% to 30%. Reinforcement Materials EBITDA: $117 million with an EBITDA margin of 20%. Reinforcement Materials Volumes: Global volumes increased 5% year over year; Asia Pacific volumes up 10% and Americas volumes up 4%. Battery Materials EBITDA: Expectation of approximately $40 million for fiscal 2026 reaffirmed; trailing 12-month EBITDA margins of approximately 24%. Fiscal 2026 Adjusted EPS Guidance: Tightened to $6.15 to $6.45 per share. Fiscal 2026 Capital Expenditure Guidance: Narrowed to $200 million to $215 million. Warning! GuruFocus has detected 6 Warning Sign with CBT. Is CBT fairly valued? Test your thesis with our free DCF calculator. Release Date: August 04, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Cabot Corp (NYSE:CBT) delivered adjusted EPS of $1.67 in Q3 fiscal 2026, a 4% increase sequentially, driven by strong execution and solid performance in the Performance Chemicals segment. Performance Chemicals segment EBIT increased 19% year-over-year to $68 million, fueled by higher volumes in battery materials and fumed metal oxides, as well as improved gross profit per ton from favorable product mix and proactive pricing actions. Battery materials business continues to scale rapidly, with the company reaffirming its fiscal 2026 EBITDA expectation of approximately $40 million and trailing 12-month EBITDA margins of around 24%. The company is making strategic, capital-efficient investments of approximately $125 million to expand conductive additive capacity at existing US sites, which is expected to come online in 2028 and support customer growth in a flexible manner. Reinforcement Materials volumes increased 5% year-over-year, driven by strong growth in Asia Pacific (up 10%) and the Americas (up 4%), benefiting from the Indonesia capacity ramp and the Mexico acquisition. The company generated robust cash flow from operations of $75 million in the quarter despite higher working capital needs, and maintains a strong liquidity position of approximately $1.3 billion with a net debt-to-EBITDA ratio of 1.4 times. Cabot Corp (NYSE:CBT) received a Platinum Sustainability Rating from EcoVadis for the sixth consecutive year, placing it in the top 1% of companies in its category. The company is seeing strong demand tailwinds in infrastructure applications like wire and cable, driven by grid renewal and AI-related power demand, as well as in electronics and semiconductors. Management is encouraged by the EU's decision to implement anti-dumping duties on Chinese tire imports, which is a positive development for the European tire industry and could benefit Reinforcement Materials over time. The company tightened its fiscal 2026 adjusted EPS guidance to a range of $6.15 to $6.45, reflecting confidence in its ability to execute through a dynamic environment. Reinforcement Materials segment EBIT declined to $97 million in Q3 fiscal 2026 from $128 million in the prior year, primarily due to lower gross profit per ton from the outcomes of calendar year 2026 customer agreements. The operating environment remains challenging, with ongoing geopolitical tensions in the Middle East, continued volatility in energy and raw material costs, and mixed demand conditions across many end markets. The company expects a modest sequential decline in Reinforcement Materials EBIT in the fourth quarter, driven by lower seasonal demand and a less favorable regional product mix, particularly in Europe. Performance Chemicals gross profit per ton is expected to normalize in the fourth quarter as raw material costs catch up to the pricing actions implemented in the third quarter, potentially impacting margins. The company experienced a significant increase in net working capital of approximately $44 million in the quarter due to rapidly rising raw material costs, which impacted cash flow. Cabot Corp (NYSE:CBT) did not repurchase any shares in the third quarter, although it expects to resume buybacks in the fourth quarter. The company is updating its expected fiscal 2026 operating tax rate range to 28% to 30%, reflecting a modest increase due to changes in the expected geographic mix of earnings. The leadership transition, with CEO Sean Keohane retiring and CFO Erica McLaughlin stepping in, introduces some uncertainty, and the company has initiated a search for a new CFO. The company has redefined its US battery materials expansion plans from a greenfield facility in Michigan to brownfield additions at existing sites, reflecting evolving EV market conditions and a need for more flexible capacity timing. The company faces ongoing pricing pressure in Reinforcement Materials from annual tire customer agreements, which continues to impact year-over-year comparisons. Q: How is Cabot managing pricing for specialty carbons amid the current oil price volatility, and what is the expectation for margins in the fourth quarter? A: Sean Keohane, CEO and President, explained that managing pricing in response to oil volatility is a top priority and a capability the company has honed over time. In Q3, the team executed disciplined pricing actions to reflect higher oil costs. Looking to Q4, they expect margins to normalize as higher raw material costs catch up with the pricing already implemented. The company remains vigilant in adjusting pricing as oil moves, while continuing to focus on value-based pricing and favorable product mix in high-growth areas. Q: Are Cabot's growth investments in battery materials keeping pace with industry growth, and how is the company positioning its market share? A: Sean Keohane stated that battery materials is central to the company's growth strategy. Cabot is uniquely positioned due to its broad portfolio of conductive additives and its global manufacturing footprint, which supports customers as they build gigafactories in Western markets. The company has been successful in synchronizing capacity additions with customer startup timelines and has been growing above the market rate. The recent $125 million investment in brownfield expansions in the US and China is expected to support growth for approximately three years, with new capacity coming online in 2028. Q: What is the current trend in tire imports, and how are recent regulatory developments impacting the Reinforcement Materials segment? A: Sean Keohane provided an update on tire imports, noting that the EU's decision to implement anti-dumping duties on Chinese tire imports is a positive development for the European tire industry. Year-to-date tire imports into the EU are down 16% compared to the same period in 2025. In North America, imports are down about 3% year-to-date, with a 2% decline into the US specifically. These trends are encouraging and supportive of market fundamentals, although the situation remains dynamic. Q: Are there specific end markets within battery materials, such as EVs versus energy storage, that offer higher margins or better growth prospects? A: Sean Keohane explained that the battery market encompasses various applications, including EVs, battery energy storage systems (BESS), and emerging industrial uses like drones and robotics. Each application has different performance requirements and chemistries (e.g., LFP, NCM). Cabot is agnostic to demand levels across these segments, as conductive additives are required in all. The breadth of its product portfolio allows the company to tailor solutions for specific performance needs, such as fast-charge capability or range, positioning it well to capture growth across the board. Q: Can you provide an early look at battery materials sales and EBITDA growth for fiscal 2027? A: Sean Keohane noted that the battery materials business is scaling rapidly and performing well. The global battery demand is expected to more than double by the end of the decade, driven by EVs, BESS, and emerging applications. Cabot's growth expectations are greater than the market's strong compound annual growth rate. The company has high confidence and visibility in this growth, particularly with the rise of battery energy storage supporting the AI supercycle and new use cases like drones and robotics. Q: Can you size the organic demand growth in Reinforcement Materials for the Americas and Asia, excluding the Mexico acquisition and Indonesia expansion? A: Sean Keohane clarified that in the Americas, the 4% volume increase was driven by both the new asset in Mexico and higher base business volumes. In Asia Pacific, volumes were up 10%, benefiting from the new Indonesia capacity, underlying demand, and an easier comparison to a weak quarter in China last year. Looking to Q4, the company expects normal seasonality, with demand developing as expected. Q: How should we think about Cabot's long-term capital expenditure levels, and what is the status of the previously announced Michigan greenfield project and the DOE grant? A: Erica McLaughlin, CFO, stated that future capital spending should be at similar levels to recent spending, covering maintenance, compliance, and growth initiatives. The company has shifted its US expansion plans from the greenfield Michigan facility to brownfield additions at two existing US sites, which is more capital-efficient and flexible. Regarding the DOE grant announced in 2024, Cabot continues discussions with the DOE and will provide updates when concluded. Q: Is the expected margin normalization in Performance Chemicals for Q4 due to raw material cost catch-up or a mix shift? A: Erica McLaughlin confirmed that the primary factor driving the Q3 to Q4 margin normalization is the roll-through of higher raw material costs aligning with the pricing actions taken. While there is normal seasonal volume decline and potentially minor mix impacts, the predominant driver is the raw material cost flow-through. Q: What are the growth expectations for the Performance Chemicals segment, and how are different end markets performing? A: Sean Keohane indicated that overall segment volumes are expected to grow low single-digits this year, with a normalized growth rate of 1.5 to 2 times GDP. While some end markets like automotive OE production and housing/construction face headwinds, others such as infrastructure (wire and cable), electronics (semiconductors), and battery materials are experiencing strong tailwinds driven by AI, grid renewal, and energy storage demand. Q: How long will the new battery materials capacity expansions support growth, and when might the next phase of expansion be needed? A: Sean Keohane explained that the global asset network provides optionality to synchronize capacity with customer expansions, avoiding the pitfall of getting ahead of demand. The current projects, expected to come online in 2028, should support growth for approximately three years. The company will continue developing the next wave of expansion options across its global network as the market develops. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Performance in Q3 was driven by strong execution in Performance Chemicals, which saw a 19% year-over-year EBIT increase despite dynamic market conditions. Reinforcement Materials faced headwinds from 2026 annual tire customer agreements, resulting in lower gross profit per ton that offset a 5% increase in global volumes. Management attributed volume growth in Asia Pacific (10%) and the Americas (4%) to the successful ramp of capacity in Indonesia and the integration of a recent acquisition in Mexico. The Battery Materials product line is scaling rapidly, maintaining 24% EBITDA margins by leveraging a unique global footprint and a broad portfolio of conductive additives. Strategic positioning is increasingly focused on high-growth tailwinds in infrastructure, AI-driven electronics, and battery energy storage systems (BESS) to offset weakness in automotive and construction. The leadership transition, with Erica McLaughlin succeeding Sean Keohane as CEO, is framed as a planned process to ensure continuity in strategy and disciplined capital allocation. Fiscal 2026 adjusted EPS guidance was tightened to $6.15–$6.45, reflecting assumptions for continued energy price volatility and seasonal demand shifts in Q4. Management redefined U.S. battery capacity expansion from a greenfield site to a $125 million brownfield investment at two existing sites to improve capital efficiency and synchronization with customer timelines. Q4 outlook for Reinforcement Materials assumes a modest sequential EBIT decline due to seasonal demand drops and less favorable regional product mix in Europe. Performance Chemicals margins are expected to normalize in Q4 as raw material costs catch up to the proactive pricing actions implemented during Q3. The company plans to refinance its public bond maturing in September, maintaining a disciplined approach to liquidity and a net debt-to-EBITDA ratio was 1.4x as of June 30. The shift from a Michigan greenfield project to brownfield expansions reflects a strategic pivot to match evolving EV market conditions and growing BESS demand. Management highlighted the positive impact of new EU antidumping duties on Chinese tire imports (24% to 45%) as a structural tailwind for the European tire industry. Rising raw material costs resulted in a $44 million increase in net working capital, though robust operations still generated $75 million in cash flow. The company earned its sixth consecutive Platinum sustainability rating from EcoVadis, placing it in the top 1% of basic chemicals manufacturers globally. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management emphasized that while pricing is primarily value-based, they must respond to dynamic raw material movements to protect margins. Margins are expected to normalize in Q4 as the lag between price increases and raw material cost flow-through closes. Cabot aims to grow above the market rate by synchronizing capacity additions with customer gigafactory start-ups to avoid over-expansion. The current $125 million expansion plan is estimated to support the company's growth trajectory for approximately three years post-2028 completion. Tire imports into the EU are down 16% year-to-date through April, which management views as an encouraging trend for market fundamentals. North American imports also showed a slight decline (3%), supporting a more stable domestic demand environment for reinforcement materials. While batteries and AI-driven electronics (CMP applications) are strong, housing and automotive OE production remain significant headwinds. On a normalized basis, the segment is expected to grow at 1.5 to 2 times GDP, despite current mixed end-market demand.

Interested in Cabot Corporation? Here are five stocks we like better. Cabot’s adjusted EPS rose 4% sequentially to $1.67 in fiscal Q3 2026, driven by stronger Performance Chemicals results that offset weaker Reinforcement Materials earnings. The company narrowed its full-year adjusted EPS outlook to $6.15–$6.45. Cabot will replace a planned Michigan greenfield battery-materials facility with expansions at two existing U.S. sites, investing approximately $125 million for capacity expected to come online in 2028. Battery materials remain on track to generate about $40 million in fiscal 2026 EBITDA. CEO Sean Keohane will retire on Sept. 30, 2026, with CFO Erica McLaughlin appointed as his successor. Despite geopolitical and cost pressures, Cabot expects to resume share buybacks in the fourth quarter and maintains a solid liquidity position of about $1.3 billion. 10 Best Natural Gas Stocks to Buy Now Cabot (NYSE:CBT) reported third-quarter fiscal 2026 adjusted earnings per share of $1.67, up 4% sequentially, as strength in its Performance Chemicals segment helped offset lower earnings in Reinforcement Materials. The company also tightened its full-year adjusted EPS guidance to a range of $6.15 to $6.45, compared with its previous outlook of $6.00 to $6.50. Management cited differing demand and cost scenarios amid geopolitical uncertainty and volatility in oil-related prices. → SpaceX’s First Earnings Report Could Decide Whether Shorts or Bulls Have Control Cabot Boosting Production In Lithium Battery Chain For EV Market “Our results reflect solid execution by our team,” President and CEO Sean Keohane said on the company’s earnings call. He said the operating environment remained challenging due to Middle East geopolitical tensions, volatile energy and raw-material costs, and mixed end-market demand. Keohane said he will retire effective Sept. 30, 2026, after nearly 25 years with Cabot and 10 years as president and CEO. He will continue in an advisory role through the end of calendar 2026 to support the transition. → Financials Hit Record Highs as the AI Trade Unravels—Can They Keep Leading? The board appointed Executive Vice President and Chief Financial Officer Erica McLaughlin as Cabot’s next president and CEO. McLaughlin has spent nearly 25 years at the company and previously held positions including vice president of business operations for Reinforcement Materials and general manager of the tire business. McLaughlin said Cabot’s strategy and priorities will remain unchanged, including performance in core businesses, advancing growth initiatives, investing in innovation, disciplined capital allocation and pursuing opportunities that support long-term value creation. The company has initiated a search for McLaughlin’s successor as CFO. → Why Rare Earth Processing Could Be the Real 2027 Opportunity Performance Chemicals delivered segment EBIT of $68 million in the quarter, up $11 million year over year, or 19%, according to Keohane. The increase reflected higher volumes and improved gross profit per ton. Battery materials was a major source of volume growth, supported by electric vehicle and battery energy-storage applications, as well as participation with global battery manufacturers. Cabot also recorded stronger fumed metal oxides volumes, driven by electronics-related demand. Management said gross profit per ton improved due to a more favorable product mix and pricing actions taken before raw-material costs rose. In the fiscal fourth quarter, however, Cabot expects lower seasonal volumes and margins to normalize as higher raw-material costs catch up with third-quarter pricing actions. Keohane reaffirmed Cabot’s expectation that its battery materials product line will generate about $40 million of EBITDA in fiscal 2026. The business had trailing 12-month EBITDA margins of approximately 24% at the end of the third quarter, he said. The company is revising its U.S. battery-materials expansion plan, replacing a previously contemplated greenfield facility in Michigan with capacity additions at two existing U.S. sites. Cabot expects to invest about $125 million in those projects, with additional capacity anticipated to come online in 2028. The spending is already included within the company’s existing capital-expenditure envelope. Keohane said the brownfield approach would offer greater flexibility and capital efficiency while allowing Cabot to align capacity with customer startup schedules. He said the additions should support roughly three years of the company’s growth expectations, while Cabot develops further expansion options across its global manufacturing network. Reinforcement Materials generated third-quarter EBIT of $97 million, down from $128 million in the prior-year quarter. EBITDA was $117 million, with a 20% EBITDA margin. The earnings decline primarily reflected lower gross profit per ton tied to calendar 2026 tire-customer agreements. Higher volumes and a more favorable regional product mix partially offset the pricing pressure. Global Reinforcement Materials volumes rose 5% from a year earlier, including a 10% increase in Asia Pacific and a 4% increase in the Americas. Management said the growth included contributions from the ramp-up of Indonesian capacity and a recently acquired Mexican asset, along with higher base-business volumes in the Americas. For the fourth quarter, Cabot expects a modest sequential decline in Reinforcement Materials EBIT, driven by normal seasonal demand reductions and a less favorable regional product mix, particularly in Europe. Keohane said tire-import trends had been encouraging. European Union tire imports were down 16% year to date through April compared with the same 2025 period, while North American imports declined about 3%. He also pointed to recently implemented EU anti-dumping duties on Chinese tire imports, which he said could support the European tire industry over time. Cabot generated $75 million in operating cash flow during the third quarter, despite approximately $44 million of higher net working capital associated with rising raw-material costs. The company invested $38 million in capital expenditures and returned $24 million to shareholders through dividends. Although Cabot did not repurchase stock during the quarter, McLaughlin said it had repurchased $101 million of shares year to date and expects to resume buybacks in the fourth quarter. The company ended the quarter with $250 million of cash and cash equivalents and approximately $1.3 billion of liquidity. Debt stood at about $1.3 billion, and net debt to EBITDA was 1.4 times as of June 30. Cabot expects to refinance a public bond maturing in September during the fourth quarter. Cabot narrowed its fiscal 2026 capital-expenditure forecast to $200 million to $215 million, reducing the high end by $15 million. It also updated its expected operating tax-rate range to 28% to 30%, reflecting changes in the anticipated geographic mix of earnings. Looking beyond the current fiscal year, Keohane said Cabot sees growth support from infrastructure applications such as wire and cable, semiconductor-related electronics demand, and battery materials. He said the company will continue to pursue network optimization, operational improvements, targeted growth investments, dividends and share repurchases while maintaining financial flexibility. Cabot Corporation is a global specialty chemicals and performance materials company headquartered in Boston, Massachusetts. Founded in 1882 by Godfrey Lowell Cabot, the company has grown into a diversified manufacturer with operations across North America, Europe, Asia and Latin America. Cabot serves a wide range of end markets, including automotive, industrial, energy, and consumer products, supplying essential ingredients that enhance performance, durability and functionality. The company operates two primary segments: Reinforcement Materials and Performance Materials. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Cabot Q3 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Cabot (CBT) came out with quarterly earnings of $1.67 per share, beating the Zacks Consensus Estimate of $1.66 per share. This compares to earnings of $1.9 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +0.60%. A quarter ago, it was expected that this chemical company would post earnings of $1.47 per share when it actually produced earnings of $1.61, delivering a surprise of +9.52%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. Cabot, which belongs to the Zacks Chemical - Diversified industry, posted revenues of $982 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 7.38%. This compares to year-ago revenues of $923 million. The company has topped consensus revenue estimates just once over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Cabot shares have added about 32.8% since the beginning of the year versus the S&P 500's gain of 9.4%. While Cabot has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Cabot was favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.46 on $896.61 million in revenues for the coming quarter and $6.35 on $3.56 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Chemical - Diversified is currently in the bottom 43% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the same industry, Koppers (KOP), has yet to report results for the quarter ended June 2026. The results are expected to be released on August 6. This maker of chemicals, carbon compounds and wood treatment products is expected to post quarterly earnings of $1.12 per share in its upcoming report, which represents a year-over-year change of -24.3%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Koppers' revenues are expected to be $506.1 million, up 0.3% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Cabot Corporation (CBT) : Free Stock Analysis Report Koppers Holdings Inc. (KOP) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

It has been about a month since the last earnings report for Albemarle (ALB). Shares have lost about 16.5% in that time frame, underperforming the S&P 500. Will the recent negative trend continue leading up to its next earnings release, or is Albemarle due for a breakout? Well, first let's take a quick look at its latest earnings report in order to get a better handle on the recent drivers for Albemarle Corporation before we dive into how investors and analysts have reacted as of late. Albemarle posted a first-quarter 2026 adjusted earnings of $2.95 per share. This compares favorably with the adjusted loss of 18 cents a year ago. The figure beat the Zacks Consensus Estimate of $1.24 by 137.9%, as higher lithium pricing and improved volumes lifted results.On a reported basis, net income attributable to Albemarle rose to $319.1 million from $41.3 million, reflecting a much stronger operating backdrop.Net sales rose 32.7% year over year to $1.43 billion and topped the consensus mark of $1.33 billion by 7.8%. Demand indicators stayed constructive, with global Energy Storage Systems production up 117% year over year in the quarter. Energy Storage net sales climbed 69.9% year over year to $891.2 million, driven by higher pricing and volumes. It surpassed the consensus estimate of $775 million. Management attributed the gain to a 51% increase in price and a 14% rise in volumes versus the prior-year quarter.Specialties net sales increased 11.7% year over year to $358.4 million. It also beat the consensus estimate of $319 million. The improvement reflected a 7% lift in volumes and a 2% increase in pricing, helped by bromine specialties demand and pricing.Corporate and all other net sales were $179.2 million versus $231.3 million a year ago.The divestiture of Ketjen reduced companywide net sales by 4% year over year. Cash and cash equivalents were $1.09 billion as of March 31, 2026, compared with $1.62 billion as of Dec. 31, 2025. Long-term debt was $1.81 billion at the quarter-end, down from $3.12 billion at the end of 2025 after the company paid down $1.3 billion of outstanding debt during the quarter. Net cash provided by operating activities was $346.2 million in the first quarter of 2026 versus $547.2 million in the year-ago period. Albemarle updated its 2026 outlook considerations, raising the Specialties view on stronger-than-expected bromine pricing. The company now expects Specialties net sales of $1.3-$1.5 billion and adjusted EBITDA of $225-$275 million for 2026.For the total company, Albemarle continues to frame expectations around observed lithium market price scenarios. At an average lithium market price of about $10/kg LCE, it expects net sales of $4.1-$4.3 billion and adjusted EBITDA of $0.9-$1.0 billion. At about $20/kg LCE, net sales are projected at $5.7-$6.0 billion with adjusted EBITDA of $2.4-$2.6 billion. At about $30/kg LCE, net sales are forecast at $7.5-$7.8 billion and adjusted EBITDA at $4.2-$4.4 billion.Albemarle expects depreciation and amortization expenses of $660-$680 million for 2026. Capital expenditures are expected to be $550-$600 million, while Interest and financing expenses are forecast to be $120-$140 million for the full year. In the past month, investors have witnessed a upward trend in estimates revision. The consensus estimate has shifted 61.57% due to these changes. Currently, Albemarle has a average Growth Score of C, however its Momentum Score is doing a bit better with a B. However, the stock was allocated a score of D on the value side, putting it in the bottom 40% for value investors. Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in. Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Albemarle has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months. Albemarle is part of the Zacks Chemical - Diversified industry. Over the past month, Cabot (CBT), a stock from the same industry, has gained 2.2%. The company reported its results for the quarter ended March 2026 more than a month ago. Cabot reported revenues of $904 million in the last reported quarter, representing a year-over-year change of -3.4%. EPS of $1.61 for the same period compares with $1.90 a year ago. Cabot is expected to post earnings of $1.66 per share for the current quarter, representing a year-over-year change of -12.6%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.8%. The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Cabot. Also, the stock has a VGM Score of A. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Albemarle Corporation (ALB) : Free Stock Analysis Report Cabot Corporation (CBT) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research