BOSTON, May 05, 2026 (GLOBE NEWSWIRE) -- Cabot Corporation $(CBT)$ today announced results for its second quarter fiscal year 2026.
Second Quarter Highlights
-- Second Quarter Diluted EPS of $1.27 and Adjusted EPS of $1.61
-- Reinforcement Materials segment EBIT of $93 million and Performance
Chemicals segment EBIT of $59 million
-- Battery Materials momentum continues, supported by strong execution,
growing battery energy storage systems $(BESS)$ and electric vehicle
related demand, providing meaningful EBITDA contribution
-- Announced an increase in the quarterly dividend of 5%, raising the
annualized dividend from $1.80 to $1.89
-- Pursuing asset optimization across our global plant network with an
intention to close manufacturing operations in South America and Europe,
subject to local consultation processes
(In millions, except
per share amounts) Three Months Ended Six Months Ended
---------------------- ----------------------
3/31/26 3/31/25 3/31/26 3/31/25
------------ -------- ----------- ---------
Net sales and other
operating revenues $ 904 $ 936 $ 1,753 $1,891
Net income (loss)
attributable to
Cabot Corporation $ 68 $ 94 $ 141 $ 187
Net earnings (loss)
per share
attributable to
Cabot Corporation $ 1.27 $ 1.69 $ 2.64 $ 3.36
Less: Certain
items after tax
per share $ (0.34) $ (0.21) $ (0.50) $(0.30)
Adjusted EPS $ 1.61 $ 1.90 $ 3.14 $ 3.66
-------------------- ------- ------ ------ -----
Sean Keohane, Cabot President and Chief Executive Officer commented: "I am pleased with our strong execution during the quarter as we continued to operate at a high level in a challenging environment, delivering Adjusted EPS of $1.61 and resulting in a solid first half of the fiscal year. Our results reflect disciplined execution across the organization, particularly in commercial and operational excellence. Performance Chemicals segment EBIT increased 18% year-over-year supported by continued strong momentum in our battery materials product line and higher volumes in our specialty carbons product line. Reinforcement Materials segment EBIT declined 29% year-over-year, as 3% higher volumes were more than offset by lower gross profit per ton. Overall, I am encouraged by our team's performance as we navigate dynamic market conditions."
Keohane continued, "As we continue to optimize our asset footprint, the Company intends to target capacity rationalization at facilities in South America and Europe, subject to local consultation processes. These actions are intended to better align production with demand conditions and enable a more efficient manufacturing network to meet our customer supply needs. We expect these actions will generate annualized fixed cost savings of approximately $22 million once fully implemented."
Keohane continued, "We continued to generate strong operating cash flow that enabled us to invest in capital expenditures and return cash to shareholders. Our balance sheet remains strong with available liquidity of $1.3 billion and a net debt to EBITDA ratio of 1.5 times as of March 31, 2026. I am pleased with the solid cash flow performance and our strong balance sheet, which enable us to continue to deliver on our capital allocation priorities."
Financial Detail
For the second quarter of fiscal 2026, net income attributable to Cabot Corporation was $68 million ($1.27 per common share). Net income reflects an after-tax per share charge from certain items of $0.34. Adjusted EPS for the second quarter of fiscal 2026 was $1.61 per share.
Segment Results
Reinforcement Materials -- Second quarter fiscal 2026 EBIT in Reinforcement Materials decreased by $38 million compared to the second quarter of fiscal 2025. The decrease in EBIT was largely driven by lower gross profit per ton, primarily due to lower pricing and product mix in our calendar year 2026 tire customer agreements and from increased competitive intensity in Asia Pacific. Volumes increased by 3% in the second quarter of fiscal 2026 as compared to the second quarter of fiscal 2025 driven by higher volumes across all regions.
Global and regional volume changes for Reinforcement Materials for the second quarter of fiscal 2026 as compared to the same quarter of the prior year are set forth in the table below:
Second Quarter
Year-over-Year Change
----------------------
Global Reinforcement Materials Volumes 3%
Asia Pacific 5%
Europe, Middle East, Africa 3%
Americas 1%
--------------------------------------- ----------------------
Performance Chemicals -- Second quarter fiscal 2026 EBIT in Performance Chemicals increased by $9 million compared to the second quarter of fiscal 2025 primarily due to higher gross profit per ton. The higher gross profit per ton was primarily due to a favorable product mix and optimization efforts. In addition, volumes increased in our battery materials and specialty carbons product lines in the second quarter of fiscal 2026 as compared to the second quarter of fiscal 2025.
Cash Performance -- The Company ended the second quarter of fiscal 2026 with a cash balance of $252 million. During the second quarter of fiscal 2026, cash flows from operating activities were a source of $77 million. Capital expenditures for the second quarter of fiscal 2026 were $45 million. Additional uses of cash during the second quarter included $24 million for the payment of dividends and $49 million for share repurchases.
Taxes -- During the second quarter of fiscal 2026, the Company recorded a tax expense of $44 million with an effective tax rate of 37%, which included an $8 million charge for discrete and certain tax items. The operating rate was 28% in the second quarter of fiscal 2026 and we expect our operating tax rate for fiscal 2026 to be in the range of 27% to 29%.
Outlook
Commenting on the outlook for the Company, Keohane said, "As we look ahead to the remainder of fiscal 2026, we are reaffirming our Adjusted EPS guidance for the full year to be in the range of $6.00 to $6.50 per share. Our outlook incorporates our best view of the impacts to our businesses from the conflict in the Middle East and the uncertainty it creates. While we expect near term demand to remain stable, we are cautious of potential changes in demand levels towards the end of the fiscal year due to disruptions from the Middle East crisis. In addition, we expect to maintain our margins with price increases to offset higher input costs across both segments."
Keohane continued, "We have delivered a solid first half of the fiscal year and executed well against the financial commitments we made in a difficult demand environment. I am confident in our team's agility and discipline to navigate the current volatile environment. To further strengthen our competitive position, we will continue to pursue actions across our network in commercial excellence, cost management, and the asset rationalizations previously mentioned."
Keohane concluded, "We remain focused on disciplined operational execution and maintaining financial flexibility as we navigate an uncertain macro environment. Supported by a strong balance sheet and ample liquidity, I believe we are well positioned to manage near-term pressures, including elevated energy costs and geopolitical uncertainty. I believe the actions we are taking today will strengthen the company and support our strategy for long-term value creation."
Earnings Call
The Company will host a conference call with industry analysts at 8:00 a.m. Eastern time on Wednesday, May 6, 2026. The call can be accessed through Cabot's investor relations website at http://investor.cabot-corp.com
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 -- This earnings 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 2026, including our expectations for Adjusted EPS for fiscal 2026, our expectations for capital allocation and operating cash flow for fiscal 2026, our expectations for asset rationalizations and anticipated benefits we expect to achieve including for cost savings from those actions, our expected operating tax rate for fiscal 2026, and our assumptions underlying those expectations 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, 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 and conflict in the Middle East; 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; interest rates, tax rates, currency exchange controls, tariffs and fluctuations in foreign currency rates; and the accuracy of the assumptions we used in establishing reserves for our share of liability for respirator claims. 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, 2025, which are 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.
Use of Non-GAAP Financial Measures
To supplement Cabot's consolidated financial statements presented on a generally accepted accounting principle ("GAAP") basis, the preceding discussion of our results and the accompanying financial tables report Adjusted EPS, Adjusted EBITDA, our operating tax rate, Free Cash Flow and Discretionary Free Cash Flow, all of which are non-GAAP financial measures. These non-GAAP financial measures are not computed in accordance with, or as an alternative to, GAAP, and the definitions of these measures may not be comparable to those used by other companies. Reconciliations of Adjusted EPS to net income (loss) per share attributable to Cabot Corporation, the most directly comparable GAAP financial measure, Adjusted EBITDA to Income (loss) from operations before income taxes and equity in earnings of affiliated companies, the most directly comparable GAAP financial measure of each such non-GAAP measure, operating tax rate to effective tax rate, the most directly comparable GAAP financial measure and Free Cash Flow and Discretionary Free Cash Flow to Cash flow provided by (used in) operating activities, the most directly comparable GAAP financial measure, are provided in the tables titled "Cabot Corporation Certain Items and Reconciliation of Adjusted EPS and Operating Tax Rate" and "Cabot Corporation Reconciliation of Non-GAAP Financial Measures."
Management believes these non-GAAP measures provide investors with greater transparency to the information used by Cabot management in its financial and operational decision-making, allow investors to see Cabot's results through the eyes of management, and better enable Cabot's investors to understand Cabot's operating performance and financial condition.
Adjusted EPS. In calculating Adjusted EPS, 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. Accordingly, reporting earnings on an adjusted basis supplements the GAAP measure of performance and provides additional information related to the underlying performance of the business. For example, certain of the items we exclude are items that we are required by GAAP to recognize in one period that relate to activities extending over several periods or relate to single events that management considers to be unusual and infrequent, although not necessarily non-recurring. We refer to these items as "certain items." Management believes excluding these items facilitates operating performance comparisons from period to period by eliminating differences caused by the existence and timing of certain expense and income items that would not otherwise be apparent on a GAAP basis and evaluates the Company's operating performance without the impact of these costs or benefits. Management also uses Adjusted EPS as a key measure in evaluating management performance for incentive compensation purposes.
The items of income and expense that we exclude from our calculations of Adjusted EPS but that are included in our GAAP net income (loss) per share, as applicable in a particular reporting period, include, but are not limited to, the following:
-- Global restructuring activities, which include costs or benefits
associated with cost reduction initiatives or plant closures and are
primarily related to (i) employee termination costs, (ii) asset
impairment charges associated with restructuring actions, (iii) costs to
close facilities, including environmental costs and contract termination
penalties, and (iv) gains realized on the sale of land or equipment
associated with restructured plants or locations.
-- Legal and environmental matters and reserves, which consist of costs or
benefits for matters typically related to former businesses or that are
otherwise incurred outside of the ordinary course of business.
-- Acquisition and integration-related charges, which include transaction
costs, redundant costs incurred during the period of integration, and
costs associated with transitioning certain management and business
processes to Cabot's processes.
-- Employee benefit plan settlements, which consist of either charges or
benefits associated with the termination of a pension plan
-- Argentina controlled currency devaluation loss related to the foreign
exchange loss from government-controlled currency devaluations on our net
monetary assets denominated in the Argentine peso and investment losses
related to the utilization of government bond programs established for
the settlement of certain foreign payables.
Cabot does not provide an expected GAAP EPS range or reconciliation of the Adjusted EPS range with an expected GAAP EPS 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 EPS in future periods.
Adjusted EBITDA. Adjusted EBITDA reflects Income (loss) from operations before income taxes and equity in earnings of affiliated companies adjusted for certain items, interest expense, depreciation and amortization, equity in earnings of affiliated companies, and unallocated corporate costs, which include unallocated corporate overhead expenses such as certain corporate salaries and headquarters expenses, plus costs related to corporate projects and initiatives.
Free Cash Flow. To calculate "Free Cash Flow" we deduct Additions to property, plant and equipment from cash flow provided by (used in) operating activities.
Discretionary Free Cash Flow. To calculate "Discretionary Free Cash Flow" we deduct sustaining and compliance capital expenditures and changes in Net Working Capital from cash flow provided by (used in) operating activities.
Operating Tax Rate. Our "operating tax rate" is calculated based upon management's forecast of the annual operating tax rate for the fiscal year applied to adjusted pre-tax earnings. The operating tax rate excludes income tax (expense) benefit on certain items, discrete tax items and, on a quarterly basis the timing of losses in certain jurisdictions. The income tax (expense) benefit on certain items is determined using the applicable rates in the taxing jurisdictions in which the certain items occurred and includes both current and deferred income tax (expense) benefit based on the nature of the certain items. Discrete tax items include, but are not limited to, changes in valuation allowance, uncertain tax positions, and other tax items, such as the tax impact of legislative changes and tax accruals on historic earnings due to changes in indefinite reinvestment assertions. Management believes that this non-GAAP financial measure is useful supplemental information because it helps our investors compare our tax rate year to year on a consistent basis and to understand what our tax rate on current operations would be without the impact of these items.
Cabot does not provide a forward-looking reconciliation of the operating tax rate range with an effective tax rate 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 the effective tax rate in future periods.
Explanation of Terms Used
Product Mix. The term "product mix" refers to the mix of types and grade of products sold or the mix of geographic regions where products are sold, and the positive or negative impact this has on the revenue or profitability of the business or segment.
Net Working Capital. The term "net working capital" includes accounts receivable, inventory and accounts payable and accrued expenses.
CABOT CORPORATION
CONSOLIDATED STATEMENTS OF
OPERATIONS
Periods ended March
31 Three Months Six Months
Dollars in
millions, except
per share amounts
(unaudited) 2026 2025 2026 2025
Net sales and other
operating
revenues $ 904 $ 936 $1,753 $1,891
Cost of sales 694 695 1,332 1,415
---- ---- ----- -----
Gross profit 210 241 421 476
Selling and
administrative
expenses 67 64 136 130
Research and
technical
expenses 14 15 27 29
---- ---- ----- -----
Income (loss)
from
operations 129 162 258 317
Interest and
dividend income 7 7 14 13
Interest expense (18) (19) (36) (37)
Other income
(expense) 2 1 2 2
---- ---- ----- -----
Income (loss) from
operations before
income taxes and
equity in
earnings of
affiliated
companies 120 151 238 295
(Provision) benefit
for income taxes (44) (49) (81) (90)
Equity in earnings
of affiliated
companies, net of
tax 2 3 3 4
---- ---- ----- -----
Net income
(loss) 78 105 160 209
Net income (loss)
attributable to
noncontrolling
interests, net of
tax 10 11 19 22
---- ---- ----- -----
Net income
(loss)
attributable to
Cabot
Corporation $ 68 $ 94 $ 141 $ 187
==== ==== ===== =====
Weighted-average
common shares
outstanding
Basic 52.0 54.0 52.3 54.2
Diluted 52.2 54.4 52.6 54.7
Earnings (loss) per
common share:
Basic $1.27 $1.71 $ 2.65 $ 3.40
Diluted $1.27 $1.69 $ 2.64 $ 3.36
CABOT CORPORATION
SUMMARY RESULTS BY
SEGMENT
Periods ended March
31 Three Months Six Months
Dollars in
millions, except
per share amounts
(unaudited) 2026 2025 2026 2025
---- ---- ----- -----
Sales
Reinforcement
Materials $ 544 $ 594 $1,064 $1,205
Performance
Chemicals 328 311 628 622
---- ---- ----- -----
Segment sales 872 905 1,692 1,827
Unallocated and
other$(A)$ 32 31 61 64
---- ---- ----- -----
Net sales and other
operating
revenues $ 904 $ 936 $1,753 $1,891
---- ---- ----- -----
Segment Earnings
Before Interest and
Taxes$(B)$
Reinforcement
Materials $ 93 $ 131 $ 195 $ 261
Performance
Chemicals 59 50 107 95
Unallocated and
Other
Interest expense (18) (19) (36) (37)
Certain items$(CUL3)$ (9) (4) (16) (10)
Unallocated
corporate costs (15) (13) (27) (26)
General unallocated
income
(expense)$(D)$ 12 9 18 16
Less: Equity in
earnings of
affiliated
companies, net of
tax 2 3 3 4
---- ---- ----- -----
Income (loss) from
operations before
income taxes and
equity in
earnings of
affiliated
companies 120 151 238 295
(Provision) benefit
for income taxes
(including tax
certain items) (44) (49) (81) (90)
Equity in earnings
of affiliated
companies, net of
tax 2 3 3 4
---- ---- ----- -----
Net income (loss) 78 105 160 209
Net income (loss)
attributable to
noncontrolling
interests, net of
tax 10 11 19 22
---- ---- ----- -----
Net income (loss)
attributable to
Cabot Corporation $ 68 $ 94 $ 141 $ 187
==== ==== ===== =====
Diluted earnings
(loss) per share of
common stock
attributable to
Cabot Corporation $1.27 $1.69 $ 2.64 $ 3.36
Adjusted earnings
(loss) per
share$(E)$ $1.61 $1.90 $ 3.14 $ 3.66
Diluted weighted
average common
shares
outstanding 52.2 54.4 52.6 54.7
(A) Unallocated and other reflects external
shipping and handling fees, the impact
of unearned revenue, and discounting
charges for certain Notes receivable.
(B) Segment EBIT is a measure used by Cabot's
Chief Operating Decision-Maker to assess
segment performance and allocate
resources. Segment EBIT includes Equity
in earnings of affiliated companies, net
of tax, Net income attributable to
noncontrolling interests, net of tax,
and discounting charges for certain
Notes receivable.
(C) Details of Certain items are presented in
the Certain Items and Reconciliation of
Adjusted EPS and Operating Tax Rate
table.
(D) General unallocated income (expense)
consists of gains (losses) arising from
foreign currency transactions, net of
other foreign currency risk management
activities, Interest and dividend
income, the profit or loss related to
the corporate adjustment for unearned
revenue and unrealized holding gains
(losses) for investments. This does not
include items of income or expense from
the items that are separately treated as
Certain items.
(E) Adjusted EPS is a non-GAAP measure, and a
reconciliation of Adjusted EPS to GAAP
EPS is presented in the Certain Items
and Reconciliation of Adjusted EPS and
Operating Tax Rate table.
CABOT CORPORATION CONSOLIDATED STATEMENTS OF
FINANCIAL POSITION
March 31, September 30,
Dollars in millions (unaudited) 2026 2025
Current assets:
Cash and cash equivalents $ 252 $ 258
Accounts and notes receivable, net
of reserve for doubtful accounts of
$5 and $5 657 671
Inventories:
Raw materials 144 134
Finished goods 310 303
Other 68 67
------ ----------
Total inventories 522 504
Prepaid expenses and other current
assets 116 106
Total current assets 1,547 1,539
Property, plant and equipment 4,514 4,405
Accumulated Depreciation (2,763) (2,694)
------ ----------
Net property, plant and equipment 1,751 1,711
Goodwill 136 134
Equity affiliates 18 16
Intangible assets, net 53 55
Deferred income taxes 198 180
Other assets 194 180
------ ----------
Total assets $ 3,897 $ 3,815
====== ==========
CABOT CORPORATION CONSOLIDATED STATEMENTS OF
FINANCIAL POSITION
March 31, September 30,
Dollars in millions, except share and
per share amounts (unaudited) 2026 2025
Current liabilities:
Short-term borrowings $ 175 $ 14
Accounts payable and accrued
liabilities 598 648
Income taxes payable 34 35
Current portion of long-term debt 261 260
Total current liabilities 1,068 957
------ ----------
Long-term debt 863 856
Deferred income taxes 40 39
Other liabilities 239 258
Stockholders' equity:
Preferred stock:
Authorized: 2,000,000 shares of
$1 par value
Issued and Outstanding: None and
none -- --
Common stock:
Authorized: 200,000,000 shares of
$1 par value Issued: 51,694,096
and 52,962,353 shares
Outstanding: 51,579,624 and
52,842,481 shares 52 53
Less cost of 115,063 and 119,872
shares of common treasury stock (3) (3)
Additional paid-in capital -- --
Retained earnings 1,835 1,835
Accumulated other comprehensive income
(loss) (316) (335)
------ ----------
Total Cabot Corporation
stockholders' equity 1,568 1,550
Noncontrolling interests 119 155
------ ----------
Total stockholders' equity 1,687 1,705
------ ----------
Total liabilities and stockholders'
equity $ 3,897 $ 3,815
====== ==========
CABOT CORPORATION QUARTERLY RESULTS BY SEGMENT
Fiscal 2025 Fiscal 2026
Dollars in
millions,
except per share
amounts Sept.
(unaudited) Dec. Q Mar. Q June Q Q FY Dec. Q Mar. Q June Q Sept. Q FY
Sales
Reinforcement
Materials $ 611 $ 594 $ 573 $ 563 $2,341 $ 520 $ 544 $ _ $ _ $1,064
Performance
Chemicals 311 311 320 308 1,250 300 328 -- -- 628
Segment sales 922 905 893 871 3,591 820 872 -- -- 1,692
Unallocated and
other(A) 33 31 30 28 122 29 32 -- -- 61
Net sales and
other operating
revenues $ 955 $ 936 $ 923 $ 899 $3,713 $ 849 $ 904 $ _ $ _ $1,753
---
Segment Earnings
Before Interest
and Taxes(B)
Reinforcement
Materials $ 130 $ 131 $ 128 $ 119 $ 508 $ 102 $ 93 $ _ $ _ $ 195
Performance
Chemicals 45 50 57 42 194 48 59 -- -- 107
Unallocated and
Other
Interest expense (18) (19) (19) (20) (76) (18) (18) -- -- (36)
Certain items(C) (6) (4) (3) (17) (30) (7) (9) -- -- (16)
Unallocated
corporate costs (13) (13) (13) (13) (52) (12) (15) -- -- (27)
General
unallocated
income
(expense)(D) 7 9 6 6 28 6 12 -- -- 18
Less: Equity in
earnings of
affiliated
companies, net
of tax 1 3 1 2 7 1 2 -- -- 3
Income (loss)
from operations
before income
taxes and
equity in
earnings of
affiliated
companies 144 151 155 115 565 118 120 -- -- 238
(Provision)
benefit for
income taxes
(including tax
certain items) (41) (49) (43) (63) (196) (37) (44) -- -- (81)
Equity in
earnings of
affiliated
companies, net
of tax 1 3 1 2 7 1 2 -- -- 3
Net income
(loss) 104 105 113 54 376 82 78 -- -- 160
Net income (loss)
attributable to
noncontrolling
interests, net
of tax 11 11 12 11 45 9 10 -- -- 19
Net income
(loss)
attributable
to Cabot
Corporation $ 93 $ 94 $ 101 $ 43 $ 331 $ 73 $ 68 $ _ $ _ $ 141
---
Diluted earnings
(loss) per share
of common stock
attributable to
Cabot
Corporation $1.67 $1.69 $1.86 $0.79 $ 6.02 $1.37 $1.27 $ -- $ -- $ 2.64
Adjusted earnings
(loss) per
share(E) $1.76 $1.90 $1.90 $1.70 $ 7.25 $1.53 $1.61 $ -- $ -- $ 3.14
Diluted weighted
average common
shares
outstanding 55.0 54.4 53.8 53.4 54.2 52.9 52.2 -- -- 52.6
(A) Unallocated and other reflects external shipping
and handling fees, the impact of unearned revenue,
and discounting charges for certain Notes receivable.
(B) Segment EBIT is a measure used by Cabot's Chief
Operating Decision-Maker to assess segment performance
and allocate resources. Segment EBIT includes Equity
in earnings of affiliated companies, net of tax, Net
income attributable to noncontrolling interests, net
of tax, and discounting charges for certain Notes
receivable.
(C) Details of certain items are presented in the
Certain Items and Reconciliation of Adjusted EPS and
Operating Tax Rate table.
(D) General unallocated income (expense) consists
of gains (losses) arising from foreign currency transactions,
net of other foreign currency risk management activities,
Interest and dividend income, the profit or loss related
to the corporate adjustment for unearned revenue and
unrealized holding gains (losses) for investments.
This does not include items of income or expense from
the items that are separately treated as Certain items.
(E) Adjusted EPS is a non-GAAP measure, and a reconciliation
of Adjusted EPS to GAAP EPS is presented in the Certain
Items and Reconciliation of Adjusted EPS and Operating
Tax Rate table.
CABOT CORPORATION CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
Periods ended March
31 Three Months Six Months
Dollars in millions
(unaudited) 2026 2025 2026 2025
------------------- ----- ---- ---- ----
Cash Flows from
Operating
Activities:
Net income (loss) $ 78 $ 105 $ 160 $ 209
Adjustments to
reconcile net
income to cash
provided by
operating
activities:
Depreciation
and
amortization 49 38 90 75
Other non-cash
charges
(gains), net (18) 18 (4) 25
Cash dividends
received from
equity
affiliates -- -- 1 12
Changes in assets
and liabilities:
Changes in net
working
capital(A) (19) (76) (14) (114)
Changes in
other assets
and
liabilities,
net (13) (12) (30) (10)
----- ---- ---- ----
Cash provided
by (used in)
operating
activities 77 73 203 197
----- ---- ---- ----
Cash Flows from
Investing
Activities:
Additions to
property, plant
and equipment (45) (72) (114) (149)
Cash paid for
acquisition of
business, net of
cash acquired
$2 (66) -- (66) --
Cash paid for
asset
acquisition -- -- -- (27)
Other investing
activities, net 2 2 2 2
----- ---- ---- ----
Cash provided
by (used in)
investing
activities (109) (70) (178) (174)
----- ---- ---- ----
Cash Flows from
Financing
Activities:
Change in debt,
net 160 87 157 147
Cash dividends
paid to common
stockholders (24) (23) (48) (47)
Other financing
activities, net (83) (47) (148) (107)
----- ---- ---- ----
Cash provided
by (used in)
financing
activities 53 17 (39) (7)
----- ---- ---- ----
Effect of exchange
rate changes on
cash 1 10 8 (26)
----- ---- ---- ----
Increase (decrease)
in cash and cash
equivalents 22 30 (6) (10)
Cash and cash
equivalents at
beginning of
period 230 183 258 223
----- ---- ---- ----
Cash and cash
equivalents at end
of period $ 252 $ 213 $ 252 $ 213
===== ==== ==== ====
(A) Includes Accounts and notes receivable,
Inventories, and Accounts payable and accrued
liabilities.
CABOT CORPORATION CERTAIN ITEMS AND RECONCILIATION
OF ADJUSTED EPS AND OPERATING TAX RATE
TABLE 1: DETAIL OF
CERTAIN ITEMS
------------------------ ------------- ---------- --------------- ---------- -------
Periods ended March 31 Three Months Six Months
------------------------- ---------------------------
Dollars in millions,
except per share amounts
(unaudited) 2026 2025 2026 2025
Certain items before and
after income taxes
------------------------
Global restructuring
activities $ (8) $ (3) $ (15) $ (3)
Acquisition and
integration-related
charges (1) -- (1) --
Legal and environmental
matters and reserves -- (1) -- (6)
Other certain items -- -- -- (1)
Total certain
items,
pre-tax (9) (4) (16) (10)
Non-GAAP tax
adjustments(A) (8) (7) (10) (6)
--- ------- ----- ------ -----
Total certain
items after
tax $ (17) $ (11) $ (26) $ (16)
Total certain
items after
tax per
share $ (0.34) $(0.21) $ (0.50) $(0.30)
--- ------- ----- ------ -----
TABLE 2: CERTAIN ITEMS
STATEMENT OF OPERATIONS
LINE ITEM
------------------------- ------------- ---------- --------------- ---------- -------
Periods ended March 31 Three Months Six Months
------------------------- ---------------------------
Dollars in millions,
Pre-Tax (unaudited) 2026 2025 2026 2025
--- ------- ----- ------ --- -----
Statement of Operations
Line Item(B)
------------------------
Cost of sales $ (7) $ (2) $ (13) $ (8)
Selling and
administrative
expenses (2) (1) (3) (1)
Research and technical
expenses -- (1) -- (1)
Other income (expense) -- -- -- --
Total certain
items $ (9) $ (4) $ (16) $ (10)
--- ------- ----- ------ -----
TABLE 3: RECONCILIATION OF EFFECTIVE TAX
RATE TO OPERATING TAX RATE
---------------------------------------- ---------- --------------- ---------- -------
Three months ended March
31 2026 2025
--- ---------------- -------------------
(Provision) / (Provision) /
Dollars in millions Benefit for Benefit for
(unaudited) Income Taxes Rate Income Taxes Rate
------------- ---------- --------------- ----------
Effective Tax Rate $ (44) 37% $ (49) 32%
Less: Non-GAAP tax
adjustments(A) (8) (7)
Operating tax rate(C)
(D) $ (36) 28% $ (42) 27%
--- ------- ----- ------ -----
Six months ended March
31 2026 2025
--- ---------------- -------------------
(Provision) / (Provision) /
Dollars in millions Benefit for Benefit for
(unaudited) Income Taxes Rate Income Taxes Rate
------------- ---------- --------------- ----------
Effective Tax Rate $ (81) 34% $ (90) 30%
Less: Non-GAAP tax
adjustments(A) (10) (6)
Operating tax rate(C)
(D) $ (71) 28% $ (84) 28%
--- ------- ----- ------ -----
TABLE 4: RECONCILIATION OF ADJUSTED EPS BY QUARTER
FOR FISCAL 2026 and FISCAL 2025
---------------------------------------------------- --------------- ---------- -------
Fiscal 2026(E)
---------------------------------------------------------------
Periods ended
(unaudited) Dec. Q Mar. Q June Q Sept. Q FY 2026
------------- ---------- --------------- ---------- -------
Reconciliation of
Adjusted EPS to GAAP
EPS
------------------------
Net income (loss) per
share attributable to
Cabot Corporation $ 1.37 $ 1.27 $ -- $ -- $ 2.64
Less: Certain items
after tax per share (0.16) (0.34) -- -- (0.50)
--- ------- ----- ------ --- ----- -----
Adjusted earnings (loss)
per share $ 1.53 $ 1.61 $ -- $ -- $ 3.14
Fiscal 2025(E)
---------------------------------------------------------------
Periods ended
(unaudited) Dec. Q Mar. Q June Q Sept. Q FY 2025
------------- ---------- --------------- ---------- -------
Reconciliation of
Adjusted EPS to GAAP
EPS
------------------------
Net income (loss) per
share attributable to
Cabot Corporation $ 1.67 $ 1.69 $ 1.86 $ 0.79 $ 6.02
Less: Certain items
after tax per share (0.09) (0.21) (0.04) (0.91) (1.23)
--- ------- ----- ------ ----- -----
Adjusted earnings (loss)
per share $ 1.76 $ 1.90 $ 1.90 $ 1.70 $ 7.25
(A) Non-GAAP tax adjustments are made to arrive at the
operating tax provision. It includes the income tax
(expense) benefit on certain items, discrete tax items,
and, on a quarterly basis the timing of losses in
certain jurisdictions. The income tax (expense) benefit
on certain items is determined using the applicable
rates in the taxing jurisdictions in which the certain
items occurred and includes both current and deferred
income tax (expense) benefit based on the nature of
the certain items. Discrete tax items include, but
are not limited to, changes in valuation allowance,
uncertain tax positions, and other tax items, such
as the tax impact of legislative changes and tax accruals
on historic earnings due to changes in indefinite
reinvestment assertions.
(B) This table indicates the line items where certain
items are recorded in the Consolidated Statements
of Operations.
(C) The operating tax rate is calculated based upon management's
forecast of the annual operating tax rate for the
fiscal year applied to adjusted pre-tax earnings.
The operating tax rate excludes income tax (expense)
benefit on certain items, discrete tax items and,
on a quarterly basis the timing of losses in certain
jurisdictions.
(D) Our operating tax rate for fiscal 2026 is expected
to be in the range of 27% to 29%.
(E) Per share amounts are calculated after tax.
CABOT CORPORATION RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES
Fiscal 2026(A)
----------------------------------------------------------
Dec. Q Mar. Q June Q Sept. Q FY 2026
----------
Reconciliation of
Adjusted EPS to
GAAP EPS
-----------------
Net income (loss)
per share
attributable to
Cabot
Corporation $ 1.37 $ 1.27 $ -- $ -- $ 2.64
Less: Certain
items after tax
per share (0.16) (0.34) -- -- (0.50)
Adjusted earnings
(loss) per
share $ 1.53 $ 1.61 $ -- $ -- $ 3.14
Fiscal 2025(A)
----------------------------------------------------------
Dec. Q Mar. Q June Q Sept. Q FY 2025
----------
Reconciliation of
Adjusted EPS to
GAAP EPS
-----------------
Net income (loss)
per share
attributable to
Cabot
Corporation $ 1.67 $ 1.69 $ 1.86 $ 0.79 $ 6.02
Less: Certain
items after tax
per share (0.09) (0.21) (0.04) (0.91) (1.23)
Adjusted earnings
(loss) per
share $ 1.76 $ 1.90 $ 1.90 $ 1.70 $ 7.25
(A) Per share amounts are calculated after tax.
Dollars in
millions Fiscal 2026
----------------------------------------------------------
Dec. Q Mar. Q June Q Sept. Q FY 2026
Reconciliation of
Adjusted EBITDA
to Income (loss)
from operations
before income
taxes and equity
in earnings of
affiliated
companies
-----------------
Income (loss)
from operations
before income
taxes and equity
in earnings of
affiliated
companies $ 118 $ 120 $ _ $ _ $ 238
Interest expense 18 18 -- -- 36
Certain items 7 9 -- -- 16
General
unallocated
(income)
expense (6) (12) -- -- (18)
Less: Equity in
earnings of
affiliated
companies (1) (2) -- -- (3)
Depreciation and
amortization 41 44 -- -- 85
----- -----
Adjusted EBITDA $ 179 $ 181 $ _ $ _ $ 360
----- ----- ----- ----- -----
Dollars in
millions Dec. Q Mar. Q June Q Sept. Q FY 2026
----------
Reinforcement
Materials EBIT $ 102 $ 93 $ _ $ _ $ 195
Reinforcement
Materials
Depreciation and
amortization 19 21 -- -- 40
Reinforcement
Materials
EBITDA $ 121 $ 114 $ _ $ _ $ 235
Reinforcement
Materials Sales $ 520 $ 544 $ _ $ _ $1,064
Reinforcement
Materials EBITDA
Margin 23% 21% --% --% 22%
----- ----- ----- ----- -----
Dollars in
millions Dec. Q Mar. Q June Q Sept. Q FY 2026
---------- ---------- ---------- ----------
Performance
Chemicals EBIT $ 48 $ 59 $ _ $ _ $ 107
Performance
Chemicals
Depreciation and
amortization 22 23 -- -- 45
Performance
Chemicals
EBITDA $ 70 $ 82 $ _ $ _ $ 152
Performance
Chemicals Sales $ 300 $ 328 $ _ $ _ $ 628
Performance
Chemicals EBITDA
Margin 23% 25% --% --% 24%
----- ----- ----- ----- -----
Dollars in
millions Fiscal 2026
----------------------------------------------------------
Reconciliation of
Free Cash Flow
and Discretionary
Free Cash Flow to
Cash provided by
(used in)
operating
activities Dec. Q Mar. Q June Q Sept. Q FY 2026
----------------- ----------
Cash provided by
(used in)
operating
activities(B) $ 126 $ 77 $ _ $ _ $ 203
Less: Additions
to property,
plant and
equipment 69 45 -- -- 114
Free cash flow $ 57 $ 32 $ _ $ _ $ 89
Plus: Additions
to property,
plant and
equipment 69 45 -- -- 114
Less: Changes in
net working
capital(C) 5 (19) -- -- (14)
Less: Sustaining
and compliance
capital
expenditures 50 33 -- -- 83
Discretionary
free cash flow $ 71 $ 63 $ _ $ _ $ 134
----- ----- ----- ----- -----
(B) As provided in the Condensed Consolidated Statements
of Cash Flows.
(C) Defined as changes in Accounts and notes receivable,
Inventories, and Accounts payable and accrued liabilities
as presented on the Condensed Consolidated Statements
of Cash Flows.
Investor Contact: Robert Rist
(617) 342-6374
(END) Dow Jones Newswires
May 05, 2026 16:30 ET (20:30 GMT)
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