Cabot's Q4 Earnings and Sales Miss Estimates, Decline Y/Y

Cabot Corporation CBT recorded fourth-quarter fiscal 2025 (ended Sept. 30, 2025) earnings of 79 cents per share, down from the year-ago quarter's $2.43.

CBT posted adjusted earnings of $1.70 per share, down from the year-ago quarter figure of $1.80. Adjusted earnings missed the Zacks Consensus Estimate of $1.72.

The company’s net sales in the quarter were $899 million, which missed the Zacks Consensus Estimate of $952.6 million. Net sales fell around 10.2% from the prior-year quarter.

Cabot Corporation Price, Consensus and EPS Surprise

Cabot Corporation price-consensus-eps-surprise-chart | Cabot Corporation Quote

CBT’s Segment Highlights

Reinforcement Materials’ sales decreased around 12.6% year over year to $563 million in the reported quarter. It missed the Zacks Consensus Estimate of $617 million. Earnings before interest and tax (EBIT) in the segment were $119 million, down around 3.3% from the year-ago quarter. The decline in EBIT was primarily due to lower volumes in the Asia Pacific and the Americas. 

In the reported quarter, sales in the Performance Chemicals division declined 4.3% year over year to $308 million. It also missed the Zacks Consensus Estimate of $313 million. EBIT witnessed a decrease of approximately 4.6% to $42 million. The decline in EBIT was mainly due to 5% decrease in volumes. The lower volumes were mainly due to reduced demand in???Europe, particularly in construction-related applications. Lower costs were aided by overall cost management and optimization efforts. 

CBT’s Financials

The company concluded the fourth quarter of fiscal 2025 with a cash balance of $258 million. During the quarter, cash flows from operating activities were $219 million. Capital expenditures for the fiscal fourth quarter totaled $64 million. During the fourth quarter, cash was also used to pay dividends of $25 million and $39 million for share repurchases. 

CBT’s Outlook

The company does not anticipate a recovery in the external environment for fiscal 2026, particularly given continued weakness in regional demand for Reinforcement Materials stemming from elevated Asian tire imports into Western markets. It expects adjusted EPS for the fiscal year to range between $6.00 and $7.00. The fiscal 2026 outlook incorporates the ongoing macroeconomic uncertainty, trade challenges and competitive pressures within Reinforcement Materials. In contrast, it expects Performance Chemicals to deliver overall profit growth, supported by strength in Battery Materials and opportunities across infrastructure, alternative energy and consumer-focused applications. It also anticipates robust operating and discretionary free cash flow to fund its growth initiatives. 

CBT’s Price Performance

Shares of Cabot have lost 47.6% in the past year compared with a 39.1% decline of the industry. 

CBT’s Zacks Rank & Key Picks

CBT currently carries a Zacks Rank #3 (Hold). 

Some better-ranked stocks worth a look in the basic materials space are Avino Silver & Gold Mines Ltd. ASM, AngloGold Ashanti plc AU and Integra Resources Corp. ITRG. 

Avino Silver is slated to report third-quarter results on Nov. 6. The Zacks Consensus Estimate for third-quarter earnings is pegged at 3 cents per share. ASM’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, with the average surprise being 141.7%. Avino Silver carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

AngloGold is scheduled to report third-quarter results on Nov. 11. AU carries a Zacks Rank #1 at present. The Zacks Consensus Estimate for AU’s third-quarter earnings is pegged at $1.34, indicating a 139.3% year-over-year growth. 

Integra Resources is scheduled to report third-quarter results on Nov. 12. ITRG carries a Zacks Rank #2 at present. The consensus estimate for ITRG’s third-quarter earnings is pegged at 13 cents, indicating a 262.5% year-over-year growth. 

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This article originally published on Zacks Investment Research (zacks.com).

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