Cabot (CBT) Q3 2024 earnings summary

Executive summary

• Q3 FY2024 adjusted EPS rose 35% year-over-year to $1.92, with diluted EPS at $1.94, driven by strong operational and segment performance.

• Reinforcement Materials EBIT grew 3% to $136 million; Performance Chemicals EBIT surged 72% to $55 million, both supported by higher volumes and improved mix.

• Net sales for Q3 2024 were $1,016 million, up 5% year-over-year, with net income attributable to Cabot at $109 million.

• Operating cash flow reached $207 million, enabling $73 million in shareholder returns via dividends and share repurchases.

• Achieved a Platinum EcoVadis sustainability rating for the fourth consecutive year and advanced sustainability initiatives.

Financial highlights

• Adjusted EPS for Q3 FY24 was $1.92; diluted EPS was $1.94; net sales reached $1,016 million.

• Operating cash flow was $207 million; discretionary free cash flow was $128 million; cash and equivalents stood at $197 million.

• Capital expenditures for Q3 were $52 million; FY24 capex expected between $220 million and $240 million.

• Net debt to EBITDA stood at 1.2x; total liquidity was $1.4 billion.

• Q3 gross profit was $256 million, up from $223 million year-over-year.

Outlook and guidance

• Raised full-year adjusted EPS guidance to $7.00–$7.10, up from $6.65–$6.85, reflecting strong segment performance.

• Expects over 30% year-over-year adjusted EPS growth for FY2024 and to exceed $1 billion cumulative discretionary free cash flow from FY22–FY24.

• Reinforcement Materials and Performance Chemicals segments are projected to maintain strong year-over-year growth, with sequential improvement in Reinforcement Materials and seasonal decline in Performance Chemicals in Q4.

• Operating tax rate for FY2024 expected in the 27–28% range.