Cabot carbon black earnings grow despite lower volumes

Boston, Massachusetts – Cabot Corp.’s reinforcement materials segment, which includes the production of rubber carbon black, has reported a 17% increase in earnings despite lower revenue and volumes.

Segment earnings (EBIT) rose to $132 million for the third quarter of the fiscal year started October 2022, up from $113 million reported the year before.

Sales for the three-month period fell 14.5% to $624 million, on an overall 8% volumes decline, Cabot reported 7 Aug.

Cabot linked the increase in earnings to improved unit margins from better pricing and product mix in customer agreements.

The gains, it said, were partially offset by lower volumes, which were reported across all regions “driven by lower replacement tire demand”.

Europe, Middle East and Africa reported the sharpest decline in volumes at 12% year-over-year, followed by Americas at 10% and Asia at 5%.

Commenting on the results, president and CEO Sean Keohane said the segment delivered “record earnings” during the quarter despite weaker-than expected market conditions.

Over the short-term, Keohane said volumes in reinforcement materials are expected to “remain relatively consistent sequentially, except for some seasonal decline in Europe.

“We continue to expect strong year-over-year EBIT growth driven by the pricing and product-mix benefits in our calendar year 2023 customer agreements.”

Cabot, he added, is "delivering strong operating cash flow and remains focused on reducing costs.”