CBT Q3 Earnings Beat Estimates on Performance Chemicals Strength

Cabot Corporation CBT posted third-quarter fiscal 2026 (ended June 30, 2026) adjusted earnings of $1.67 per share, down 12.1% year over year but ahead of the Zacks Consensus Estimate of $1.66.

Revenues increased 6.4% year over year to $982 million and surpassed the consensus mark of $914.5 million by 7.4%.

Performance Chemicals delivered stronger profitability, supported by higher volumes and gross profit per ton, while Reinforcement Materials faced pressure from lower gross profit per ton.

Cabot Corporation Price, Consensus and EPS Surprise

Cabot Corporation price-consensus-eps-surprise-chart | Cabot Corporation Quote

Segmental Highlights

Reinforcement Materials sales increased 4.5% year over year to $599 million from $573 million. It beat the Zacks Consensus Estimate of $543 million. Segment EBIT declined to $97 million from $128 million in the prior-year period. The decrease primarily reflected lower gross profit per ton due to the outcomes of calendar 2026 customer agreements, partially offset by higher volumes and a more favorable regional product mix.

Reinforcement Materials volumes increased 5% globally. Asia Pacific volumes rose 10%, and Americas volumes increased 4%, while Europe, Middle East and Africa volumes declined 4%. Growth also benefited from additional capacity in Indonesia and the company's acquisition in Mexico.

Performance Chemicals sales advanced 9.7% year over year to $351 million from $320 million. It surpassed the Zacks Consensus Estimate of $339 million. Segment EBIT increased to $68 million from $57 million, supported by higher volumes and increased gross profit per ton.

Battery materials volumes benefited from stronger demand for electric vehicles and battery energy storage systems, as well as increased participation with leading global battery manufacturers. Fumed metal oxides volumes rose on growth in electronics applications. Higher gross profit per ton reflected price increases implemented ahead of rising raw material costs and a favorable product mix.

Financials

Cabot exited the third quarter of fiscal 2026 with cash and cash equivalents of $250 million. Cash provided by operating activities totaled $75 million during the quarter.

Capital expenditures were $38 million, while dividend payments totaled $24 million. The company ended the quarter with $1.3 billion of available liquidity and a net debt-to-EBITDA ratio of 1.4 times as of June 30, 2026. Free cash flow was $37 million, while discretionary free cash flow totaled $91 million.

Outlook

For fiscal 2026, Cabot tightened its adjusted earnings guidance to $6.15-$6.45 per share from the previous range of $6-$6.5. The company expects its full-year fiscal 2026 operating tax rate to be in the range of 28-30%.

Cabot also reaffirmed its expectation of approximately $40 million of EBITDA from its battery materials product line for fiscal 2026. The company is expanding global conductive additive capacity through targeted investments in the United States and China to support expected growth in global battery demand and broaden its participation with leading battery manufacturers.

CBT’s Price Performance

Shares of Cabot have gained 15.6% in the past year compared with the 9.6% rise of the industry. 

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CBT’s Zacks Rank & Key Picks

CBT currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks are Neo Performance Materials Inc. NOPMF,ClearSign Technologies Corporation CLIR and Applied Industrial Technologies, Inc. AIT

Neo Performance is slated to report second-quarter 2026 results on Aug. 11. The Zacks Consensus Estimate for earnings is pegged at 50 cents per share. NOPMF sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here. 

ClearSign is expected to report second-quarter 2026 results on Aug. 19. The consensus estimate for CLIR’s loss per share is pegged at 25 cents. CLIR presently carries a Zacks Rank #2 (Buy).

Applied Industrial is expected to report fourth-quarter 2026 results on Aug. 13. The Zacks Consensus Estimate for AIT’s fourth-quarter earnings per share is pegged at $2.92. AIT carries a Zacks Rank #2 at present.

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