Cabot's Q2 margins higher than a year ago, but lower than the previous quarter

Boston, Massachusetts - Cabot Corp. said margins in the second quarter of 2007 were higher than the same period a year earlier, but margins fell compared to the first quarter, "as price declines driven by our contracted business outpaced raw material cost decreases."

The company said "Unit margins in both rubber blacks and performance products increased when compared to the second quarter of 2006, in part because of the time lag in our feedstock related pricing adjustments on contracted business. Volume increases in both product lines, 3% in rubber blacks and 7% in performance products, combined with lower feedstock and natural gas costs and favorable foreign currency translation to more than offset increased fixed costs of new capacity, leading to improved performance when compared to the second quarter of 2006." said the company in its results statement.

Kennett Burnes, Cabot's Chairman and CEO, said, " With respect to the future, we anticipate that the benefit associated with the timing of pricing adjustments in our carbon black contracts has been realised, and we continue to watch feedstock costs closely as their volatility inevitably impacts our results. We are optimistic about carbon black volume growth outside of North America, but remain cautious about demand in North America.

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Press release from Cabot