Cabot Corporation Provides Update on Current Demand Environment
15 Junho 2023 - 6:05PM
Business Wire
Cabot Corporation (NYSE: CBT) today provided an update on the
current demand environment and the impact on its business
segments.
Sales volumes in the Performance Chemicals segment for April and
May 2023 were 13% lower than the same months of 2022 with declines
across all product lines, except Battery Materials, where volumes
continued to grow year-over-year, driven by an improvement in
electric vehicle sales in China. While sales volumes in the third
fiscal quarter in the Performance Chemicals segment have been
improving sequentially as compared to the second fiscal quarter,
the pace of improvement has been slower than what the Company
expected.
“We are not seeing the anticipated pace of recovery in China
after a challenging March quarter in the Performance Chemicals
segment,” said Sean Keohane, Cabot President and Chief Executive
Officer. “In addition to the weakness in China, we continue to see
soft demand on a global basis across many of our key end markets,
including construction and consumer applications. Given these
factors, we now expect EBIT in this segment in the third fiscal
quarter to be only modestly higher than the second fiscal
quarter.”
In the Reinforcement Materials segment, volumes were down 8% for
April and May 2023 as compared to the same months of 2022, with
declines across all regions and principally in the replacement tire
market.
Keohane continued, “Despite the demand environment, we are
seeing the expected quarterly year-over-year improvement in pricing
and product mix from our calendar year 2023 customer agreements in
the Reinforcement Materials segment. We continue to expect these
pricing and product mix benefits to drive strong growth in
year-over-year segment EBIT results in the third and fourth fiscal
quarters.”
“Although we continue to expect stronger adjusted earnings per
share in the second half of the fiscal year as compared to the
first half, the magnitude of this increase will be less than we
previously expected and we are no longer expecting adjusted
earnings per share for fiscal 2023 to be in the range of $6.10 to
$6.50,” Keohane said. “We continue to anticipate a robust operating
cash flow for the full fiscal year. We are focused on reducing
costs in the near-term and we believe our investments have us well
positioned for long-term growth. I look forward to providing a more
fulsome update on our business outlook and fiscal year adjusted
earnings per share guidance on our third quarter earnings call in
early August.”
Keohane concluded, “Despite the near-term macro-economic
challenges, I feel very good about the long-term growth of the
company. We have a Reinforcement Materials segment that I believe
is structurally at a different earnings level with more consistent
operating results. We remain excited about our leadership position
in Battery Materials and the long-term secular growth opportunity
this offers. We expect the Company’s cash flow to enable us to
continue to fund strategic growth investments, while also returning
cash to shareholders. While the Performance Chemicals segment is
facing some near-term headwinds, we expect the underlying end
markets to grow over time to support the needs of various
transportation, infrastructure and consumer applications. So while
fiscal 2023 is proving to be more challenging than we expected due
to the macro-economic weakness and a prolonged destocking cycle, I
believe we will exit the year with fourth quarter financial results
that set us up well for earnings growth and achievement of our
3-year target for adjusted earnings per share as outlined at our
2021 Investor Day.”
About Cabot Corporation
Cabot Corporation (NYSE: CBT) is a global specialty chemicals
and performance materials company headquartered in Boston,
Massachusetts. The company is a leading provider of reinforcing
carbons, specialty carbons, battery materials, engineered elastomer
composites, inkjet colorants, masterbatches and conductive
compounds, fumed metal oxides and aerogel. For more information on
Cabot, please visit the company’s website at cabotcorp.com. The
Company regularly posts important information on its website and
encourages investors and potential investors to consult the Cabot
website regularly.
Forward-Looking Statements and Use of Non-GAAP Financial
Measures – This release contains forward-looking statements.
All statements that address expectations or projections about the
future, including with respect to our expectations for our
performance in fiscal year 2023, including our expectations for
adjusted earnings per share, demand and volumes, segment EBIT and
operating cash flow, our expectations for achieving our 3-year
target for adjusted earnings per share and Battery Materials
product line growth opportunities are forward-looking statements.
These statements are not guarantees of future performance and are
subject to risks, uncertainties, potentially inaccurate
assumptions, and other factors, some of which are beyond our
control and difficult to predict. If known or unknown risks
materialize, or should underlying assumptions prove inaccurate, our
actual results could differ materially from past results and from
those expressed or implied by forward-looking statements. Important
factors that could cause our results to differ materially from
those expressed or implied in the forward-looking statements
include, but are not limited to, disruption to our operations from
the COVID-19 pandemic, industry capacity utilization and
competition from other specialty chemical companies; safety, health
and environmental requirements and related constraints imposed on
our business; regulatory and financial risks related to climate
change developments; volatility in the price and availability of
energy and raw materials, including with respect to the Russian
invasion of Ukraine; a significant adverse change in a customer
relationship or the failure of a customer to perform its
obligations under agreements with us; failure to achieve growth
expectations from new products, applications and technology
developments; failure to realize benefits from acquisitions,
alliances, or joint ventures or achieve our portfolio management
objectives; unanticipated delays in, or increased cost of site
development projects; negative or uncertain worldwide or regional
economic conditions and market opportunities, including from trade
relations, global health matters or geo-political conflicts;
litigation or legal proceedings; and tax rates and fluctuations in
foreign currency exchange and interest rates. These factors are
discussed more fully in the reports we file with the Securities and
Exchange Commission (“SEC”), particularly under the heading “Risk
Factors” in our annual report on Form 10-K for our fiscal year
ended September 30, 2022, filed with the SEC at www.sec.gov. We
assume no obligation to provide revisions to any forward-looking
statements should circumstances change, except as otherwise
required by securities and other applicable laws.
Adjusted earnings per share is a non-GAAP financial measure. In
calculating adjusted earnings per share, we exclude from our net
income (loss) attributable to Cabot Corporation items of expense
and income that management does not consider representative of the
Company’s business operations. We refer to these items as “certain
items.” For additional information regarding the items of expense
and income the Company allocates to “certain items”, please see our
Quarterly Report on Form 10-Q for the quarterly period ended March
31, 2023, filed with the SEC at www.sec.gov. Cabot does not provide
an expected GAAP earnings pers share range or reconciliation of the
adjusted earnings per share range with an expected GAAP earnings
per share range because, without unreasonable effort, we are unable
to predict with reasonable certainty the matters we would allocate
to “certain items,” including unusual gains and losses, costs
associated with future restructurings, acquisition-related expenses
and litigation outcomes. These items are uncertain, depend on
various factors, and could have a material impact on GAAP earnings
per share in future periods.
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Investor: Steve Delahunt (617) 342-6255
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