Cabot plunges in after-hours trading after business update
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Cabot fell about 8% in after-hours trading Thursday after the supplier of specialty chemicals and materials said sales declined from a year earlier.
Sales volumes in its performance chemicals business dropped 13% in April and May compared with the same period in 2022 amid declines in all product lines except battery materials.
“We are not seeing the anticipated pace of recovery in China after a challenging March quarter in the performance chemicals segment,” Sean Keohane, president and CEO of Cabot (NYSE:CBT), said in a statement. “In addition to the weakness in China, we continue to see soft demand on a global basis across many of our key end markets, including construction and consumer applications."
Cabot (CBT) doesn't expect any longer that its adjusted EPS for fiscal 2023 will be in the range of $6.10 to $6.50, he said.
Before Thursday, Cabot's (CBT) stock had risen 9.4% from 12 months earlier, compared with a 15% advance for the Standard & Poor's 500 stock index (SP500).
Earnings before interest and taxes for fiscal Q3 in its performance chemicals business will be "only modestly higher than the second fiscal quarter," Keohane said.
Cabot's (CBT) reinforcement materials unit, whose products include carbon black for strengthening automotive tires, saw an 8% yearly decline in sales for April and May.
Seeking Alpha contributor Harold Goldmeier has a Buy rating on Cabot (CBT) because its growth prospects. Columnist Individual Trader rates Cabot (CBT) as a Hold based on a technical analysis of the stock's price.