Cabot Corporation CBT posted second-quarter fiscal 2026 adjusted earnings of $1.61 per share, down 15.3% from the year-ago quarter but ahead of the Zacks Consensus Estimate of $1.47 by 9.5%.
Revenues were $904 million, down 3.4% year over year and below the consensus mark of $916.1 million by 1.3%.
On a reported basis, Cabot logged net income attributable to the company of $68 million, down from $94 million in the prior-year quarter. Earnings were $1.27 per share compared with $1.69 a year ago. Profitability moderated year over year as a combined impact of lower gross profit and modestly higher operating costs.
Cabot pointed to disciplined execution in a challenging environment, while battery materials demand tied to energy storage systems and EV-related applications continued to support results.
Cabot Corporation Price, Consensus and EPS Surprise
Cabot Corporation price-consensus-eps-surprise-chart | Cabot Corporation Quote
CBT's Segment Highlights
Reinforcement Materials sales were $544 million, down from $594 million in the year-ago quarter. It missed the Zacks Consensus Estimate of $583 million. Segment EBIT declined to $93 million from $131 million, as pricing and product mix pressured gross profit per ton in calendar 2026 tire customer agreements.
Competitive intensity in the Asia Pacific also weighed on profitability. Volumes increased 3% globally, with year-over-year gains across all regions, but the benefit from higher volumes was more than offset by weaker pricing and mix.
Performance Chemicals generated sales of $328 million, up from $311 million a year ago. It surpassed the Zacks Consensus Estimate of $315 million. Segment EBIT improved to $59 million from $50 million, primarily driven by higher gross profit per ton from a favorable product mix and optimization efforts.
Cabot also cited higher volumes in its battery materials and specialty carbons product lines. Management highlighted continuing momentum in battery materials, supported by strong execution and demand tied to battery energy storage systems.
CBT's Financials
Cabot ended the second quarter of fiscal 2026 with a cash balance of $252 million. Cash provided by operating activities was $77 million during the quarter, supporting continued investment and shareholder returns.
Capital expenditures were $45 million in the period. The company also paid $24 million in dividends during the quarter and repurchased $49 million of shares.
The company ended the quarter with a net debt-to-EBITDA ratio of 1.5x.
CBT's Outlook
For fiscal 2026, Cabot reaffirmed its adjusted earnings guidance range of $6.00 to $6.50 per share. It incorporates its assessment of the conflict in the Middle East and the uncertainty it creates, with expectations for stable near-term demand but caution around potential shifts later in the fiscal year.
The company also expects to maintain margins with price increases intended to offset higher input costs across both segments. Cabot continues to focus on commercial excellence and cost management as it navigates elevated energy costs and geopolitical uncertainty.
Separately, Cabot is pursuing asset optimization across its global plant network, with an intention of capacity rationalization at operations in South America and Europe, subject to local consultation processes. Management expects these actions to generate approximately $22 million of annualized fixed-cost savings once fully implemented.
CBT’s Price Performance
Shares of Cabot have gained 10.9% in the past year compared with the 19.3% rise of the industry.
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CBT’s Zacks Rank & Key Picks
CBT currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the basic materials space are Idaho Strategic Resources, Inc. IDR, NioCorp Developments Ltd. NB and Hawkins, Inc. HWKN.
Idaho is expected to report first-quarter 2026 results on May 14. The Zacks Consensus Estimate for earnings is pegged at 43 cents per share, indicating 258.33% year-over-year growth. IDR sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
NioCorp is expected to report third-quarter fiscal 2026 results on May 14. The consensus estimate for NB’s loss per share is pegged at 2 cents, indicating 83.33% year-over-year growth. NB presently carries a Zacks Rank #1.
Hawkins is scheduled to report fiscal fourth-quarter 2026 results on May 13. The Zacks Consensus Estimate for HWKN’s first-quarter earnings per share is pegged at 77 cents. HWKN carries a Zacks Rank #2 (Buy) at present.
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This article originally published on Zacks Investment Research (zacks.com).