Cabot (CBT) Up 1.6% Since Last Earnings Report: Can It Continue?

Core Viewpoint - Cabot's recent earnings report showed a decline in profits and revenues compared to the previous year, raising questions about future performance and market expectations [2][3][6]. Financial Performance - For Q4 fiscal 2024, Cabot reported a profit of $137 million or $2.43 per share, down from $234 million or $4.10 in the same quarter last year [2]. - Adjusted EPS for the quarter was $1.80, slightly up from $1.65 year-over-year but below the Zacks Consensus Estimate of $1.82 [2]. - Net sales increased by approximately 3.7% year-over-year to $1,001 million, missing the Zacks Consensus Estimate of $1,016.6 million [3]. Segment Highlights - Reinforcement Materials sales rose about 3.2% year-over-year to $644 million, but fell short of the Zacks Consensus Estimate of $648.2 million [4]. - Performance Chemicals unit saw a 5.2% year-over-year increase in sales to $322 million, also missing the Zacks Consensus Estimate of $339.9 million [5]. Fiscal Year Results - For fiscal 2024, Cabot's net income was $380 million or $6.72 per share, down from $445 million or $7.73 the previous year [6]. - Total net sales for the fiscal year rose around 1.6% year-over-year to $3,994 million [7]. Financial Position - At the end of Q4, Cabot had a cash balance of $223 million, with cash flows from operating activities amounting to $204 million [8]. - Capital expenditures were $92 million, with $24 million used for dividends and $66 million for share repurchases during the quarter [8]. Outlook - The company projects fiscal 2025 adjusted EPS to be between $7.40 and $7.80, indicating a 5% to 10% increase from fiscal 2024 results [9]. - Cabot expects strong operational cash flow and discretionary free cash flow to support ongoing investments and capital returns to shareholders [9]. Estimates and Ratings - Estimates for Cabot have trended upward over the past month, although the stock currently holds a Zacks Rank 4 (Sell), indicating expectations of below-average returns in the near term [10][12]. - The company has a Growth Score of A but lags in Momentum Score with a D, while holding a B grade on the value side, resulting in an aggregate VGM Score of A [11].