Cabot posts loss in Q3, but says markets and volumes are increasing

ERJ staff report (DS)

Boston, Massachusetts -- Cabot Corp reported a net loss of $12 million in the three months to 30 June 2009. However, the company noted that volumes in all key businesses improved sequentially with emerging markets showing strongest signs of recovery.

Patrick Prevost, Cabot's President and CEO, stated, "For the first time since the beginning of the downturn, we are seeing operating performance recover in a significant way. The profitability of our business segments improved by $51 million sequentially, excluding restructuring charges. We are encouraged by volume increases throughout the quarter, particularly in emerging markets where we remain committed to expanding our already strong competitive position. Carbon black margins improved due to aggressive commercial efforts and the reduced impact of older, high cost inventories.

When compared to the second quarter of fiscal 2009, Rubber Blacks profitability increased by $28 million due to higher volumes and unit margins and lower operating expenses from restructuring and cost saving actions. Volumes increased by 8% sequentially, as improvements in emerging markets (China up 34%; Asia Pacific, excluding China, up 25%; South America up 6%) more than offset declines in more developed markets (North America and Europe each down 7%). When compared to the third quarter of fiscal 2008, profitability decreased by $32 million due to 24% lower volumes from weaker global demand in the tire and automotive markets and lower unit margins from older, high cost inventories. This decline was partially offset by lower operating expenses from restructuring and cost saving actions.

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