Cabot Corporation CBT recorded net income (attributable to shareholders) of $68 million or $1.07 per share for the fourth quarter of fiscal 2017 (ended Sep 30, 2017), compared with $52 million or 83 cents recorded a year ago.
Barring one-time items, adjusted earnings for the reported quarter were 91 cents per share (down from $1.00 a year ago), which missed the Zacks Consensus Estimate of 93 cents.
Net sales increased around 16.8% year over year to $723 million in the reported quarter. The figure surpassed the Zacks Consensus Estimate of $686 million.
Adjusted earnings for the full year rose 9.2% year over year to $3.43 per share, while net sales increased 12.7% year over year to $2,717 million.
According to the company, results during the quarter mainly benefitted from higher volumes and margins.
Cabot Corporation Price, Consensus and EPS Surprise
Cabot Corporation Price, Consensus and EPS Surprise | Cabot Corporation Quote
Segment Highlights
Reinforcement Materials sales rose 27% year over year to $367 million in the fiscal fourth quarter.
Sales for the Performance Chemicals rose almost 15% year over year at $246 million in the quarter.
Sales from the Purification Solutions fell 7.5% year over year to $74 million, while Specialty Fluids segment’s sales fell 26.7% year over year to $11 million in the reported quarter.
Financial Position
Cabot Corp. ended the fiscal fourth quarter with cash and cash equivalents of $280 million, roughly 40% rise year over year.
The company’s long-term debt was down 27.7% year over year to $661 million as of Sep 30, 2017.
Cash provided by operating activities were around $157 million for the fiscal fourth quarter, up about 61.9% year over year.
Outlook
Moving forward to fiscal 2018, the company remains focused on its growth strategy in core activities, driving application innovation with customers and generating robust cash flows through optimization and efficiency. Cabot Corp. is also optimistic about the current business environment and expects to witness growth across all segments.
The company will also be speeding up its growth investments in the Carrollton and Wuhai projects, which is expected to drive future profitability. Overall, Cabot Corp. will continue to focus on creating shareholder value by generating strong discretionary free cash flow and reinvesting in core business activities along with returning cash to shareholders.
Price Performance
Shares of Cabot Corp. have moved up 21.8% in last three months outperforming the 11.2% growth recorded by its industry.
Zacks Rank & Other Stocks to Consider
Cabot Corp. currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the basic materials space are Sociedad Quimica y Minera S.A. SQM, FMC Corporation FMC and Westlake Chemical Corporation WLK. All three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.
Sociedad Quimica has an expected long-term earnings growth rate of 32.5%.
FMC has an expected long-term earnings growth rate of 11.3%.
Westlake Chemical has an expected long-term earnings growth rate of 8.4%.
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