Why Is Cabot (CBT) Down 7.9% Since Last Earnings Report?

Core Viewpoint - Cabot's recent earnings report shows mixed results, with net income increasing year-over-year but missing consensus estimates for both EPS and sales, leading to a decline in share price and a downward trend in estimates [2][3][8]. Financial Performance - Cabot reported a net income of $93 million or $1.67 per share for Q1 fiscal 2025, up from $50 million or $0.88 per share in the prior year [2]. - Adjusted EPS was $1.76, an increase from $1.56 year-over-year, but below the Zacks Consensus Estimate of $1.80 [2]. - Total sales were $955 million, missing the Zacks Consensus Estimate of $993 million and reflecting a year-over-year decline of approximately 0.3% [3]. Segment Highlights - Sales in the Reinforcement Materials segment decreased by 4.7% year-over-year to $611 million, missing the consensus estimate of $664.2 million [4]. - The Performance Chemicals unit saw a 9.1% increase in sales to $311 million, surpassing the Zacks Consensus Estimate of $296.1 million [5]. Financial Position - At the end of Q1, Cabot had a cash balance of $183 million, with cash flows from operating activities amounting to $124 million [6]. - Capital expenditures were $77 million, with $24 million allocated for dividends and $42 million for share repurchases during the quarter [6]. Outlook - Cabot anticipates adjusted EPS for fiscal 2025 to be between $7.40 and $7.80, considering business segment results and customer agreements [7]. - The company expects strong operating cash flow to support strategic growth investments and shareholder returns, while continuing its "Creating for Tomorrow" strategy [7]. - Estimates for the stock have trended downward, with a consensus estimate shift of -5.44% [8][11]. Investment Scores - Cabot has a Growth Score of A, a Momentum Score of C, and a Value Score of A, placing it in the top 20% for value investment strategy [10]. - The overall VGM Score is A, indicating strong potential across multiple investment strategies [10].