Cabot reported Q3 adjusted EPS of $1.67, tightened FY2026 guidance to $6.15-$6.45, and announced CEO Sean Keohane's retirement with Erica McLaughlin as successor.
Alpha Score of 54 reflects moderate overall profile with moderate momentum, moderate value, weak quality, moderate sentiment.
Cabot Corp. reported third-quarter adjusted earnings that came in at $1.67 a share, and the specialty chemicals company narrowed its full-year profit forecast. The guidance now calls for $6.15 to $6.45 in adjusted EPS, tighter than the prior range of $6.00 to $6.50.
GAAP net income for the quarter ended June 30 was $6 million, or $0.12 per share, dragged down by $1.55 a share in after-tax charges. Those included restructuring actions and the termination of employee benefit plans, the company said.
Reinforcement Materials, Cabot's largest segment, posted a $31 million drop in EBIT versus the same quarter last year. The decline came from lower gross profit per ton, a result of the calendar year 2026 customer agreements. Volumes were up 5%, helped by stronger demand in Asia and the Americas, including output from a capacity addition in Indonesia and an acquisition in Mexico.
“We advanced a program to expand global conductive additive capacity in our battery materials product line, consisting of targeted investments in both the United States and China,” CEO Sean Keohane said in the release. He reaffirmed the expectation of roughly $40 million in EBITDA from battery materials for the full fiscal year.
Cash from operations was $75 million in the quarter. Cabot spent $44 million on higher net working capital as raw material costs rose quickly, plus $38 million in capital expenditures and $24 million in dividends. The company ended the period with $250 million in cash and equivalents, $1.3 billion in available liquidity, and a net-debt-to-EBITDA ratio of 1.4 times.
The effective tax rate came in at 79%, inflated by a $19 million discrete expense tied to a valuation allowance after Cabot stopped carbon black production at its plant in Campana, Argentina. On an operating basis, the year-to-date tax rate was 29%, and the company expects the full-year rate to land between 28% and 30%.
Keohane also announced his retirement after nearly 25 years at Cabot and more than 10 years as CEO. The board has appointed Erica McLaughlin as his successor. “Erica is an exceptional leader with deep knowledge of our businesses, customers, and strategy,” Keohane said. The transition is part of a longstanding succession plan, the company noted.
Cabot's Alpha Score sits at 57, a moderate reading that reflects the mixed signals in the quarter: solid adjusted earnings and a tight guidance range versus heavy one-time charges and a CEO change.
The company will hold a conference call with analysts at 8 a.m. Eastern on Tuesday, Aug. 4.
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