Cabot Earnings: Here’s Why the Stock is Down Now

Cabot Corp. (NYSE:CBT) delivered a profit and missed Wall Street’s expectations, AND came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are down 0.49%.

Cabot Corp. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share decreased 16% to $0.84 in the quarter versus EPS of $1.00 in the year-earlier quarter.

Revenue: Rose 6.74% to $903 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Cabot Corp. reported adjusted EPS income of $0.84 per share. By that measure, the company missed the mean analyst estimate of $0.91. It missed the average revenue estimate of $919 million.

Quoting Management: Commenting on the results, Cabot President and CEO Patrick Prevost, said, “We experienced a sequential and year over year increase in volumes as demand in many of our end markets improved. Additionally, our Advanced Technologies segment delivered record-setting EBIT. We were also pleased with the early results of a corporate-wide initiative to reduce net working capital and generate cash. The initiative resulted in a net working capital improvement of $30 million this quarter, but caused an $8 million unfavorable impact to our operating results through the reduction of inventory. Our earnings were also unfavorably impacted by a $3 million LIFO accounting charge. Finally, the near-term challenges in the North American mercury-removal end market continue to affect performance of the Purifications Solutions segment.”

Key Stats (on next page)…

Revenue decreased 0% from $0 in the previous quarter. EPS increased 33.33% from $0.63 in the previous quarter.

Looking Forward: Analysts have a more positive outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has risen from a profit of $0.8 to a profit $0.81. For the current year, the average estimate has moved down from a profit of $3.1 to a profit of $3.01 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)