Core Insights - Cabot Corporation (CBT) reported third-quarter fiscal 2025 earnings of $1.86 per share, a decrease from $1.94 in the same quarter last year [1] - Adjusted earnings were $1.90 per share, down from $1.92 year-over-year, but exceeded the Zacks Consensus Estimate of $1.80 [1] - Net sales for the quarter were $923 million, missing the Zacks Consensus Estimate of $962.3 million, and reflecting a 9.2% decline from the prior-year quarter [1] Segment Highlights - Sales in the Reinforcement Materials segment fell approximately 11.7% year-over-year to $573 million, with EBIT down around 5.8% to $128 million due to lower volumes in Asia Pacific and the Americas [2] - The Performance Chemicals division saw a 3.6% decline in sales to $320 million, while EBIT increased by about 3.6% to $57 million, driven by higher gross profit per ton despite reduced volumes [3] Financials - At the end of the third quarter, the company had a cash balance of $239 million, with cash flows from operating activities generating $249 million [4] - Capital expenditures for the quarter totaled $61 million, with $24 million used for dividends and $40 million for share repurchases [4] Outlook - The company reaffirmed its fiscal 2025 adjusted EPS guidance of $7.15 to $7.50, citing ongoing tariff uncertainty and global economic conditions affecting customer demand [5] - Results are expected to be at the mid-to-lower end of the guidance range, although improved demand in the fourth quarter could push results higher [5] - Despite macroeconomic challenges, the company anticipates earnings growth and strong operating cash flow, focusing on cost reductions and operational optimization [5] Price Performance - Cabot's shares have declined by 18.1% over the past year, compared to a 24.4% decline in the industry [6]

[Part I. Financial Information](index=3&type=section&id=Part%20I.%20Financial%20Information) This part presents Cabot Corporation's unaudited financial statements and related disclosures [Item 1. Financial Statements (unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) Cabot Corporation's unaudited consolidated financial statements and notes for Q3 and 9M FY25 and FY24 are presented [Consolidated Statements of Operations](index=3&type=section&id=Consolidated%20Statements%20of%20Operations) This section provides Cabot Corporation's unaudited consolidated statements of operations for the specified interim periods Key Operating Results | Metric | Three Months Ended June 30, 2025 (In millions) | Three Months Ended June 30, 2024 (In millions) | Nine Months Ended June 30, 2025 (In millions) | Nine Months Ended June 30, 2024 (In millions) | | :----------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Net sales and other operating revenues | $923 | $1,016 | $2,814 | $2,993 | | Gross profit | $244 | $256 | $720 | $720 | | Income (loss) from operations | $167 | $172 | $484 | $464 | | Net income (loss) attributable to Cabot Corporation | $101 | $109 | $288 | $243 | | Basic EPS | $1.87 | $1.96 | $5.27 | $4.34 | | Diluted EPS | $1.86 | $1.94 | $5.22 | $4.30 | [Consolidated Statements of Comprehensive Income (Loss)](index=4&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) This section presents Cabot Corporation's unaudited consolidated statements of comprehensive income (loss) Key Comprehensive Income Metrics | Metric | Three Months Ended June 30, 2025 (In millions) | Three Months Ended June 30, 2024 (In millions) | Nine Months Ended June 30, 2025 (In millions) | Nine Months Ended June 30, 2024 (In millions) | | :------------------------------------------------ | :--------------------------------------------- | :--------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Net income (loss) | $113 | $120 | $322 | $278 | | Other comprehensive income (loss), net of tax | $76 | $(66) | $5 | $(21) | | Comprehensive income (loss) attributable to Cabot Corporation | $173 | $44 | $293 | $223 | [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) This section details Cabot Corporation's unaudited consolidated balance sheets as of June 30, 2025, and September 30, 2024 Balance Sheet Assets Summary | Asset Category | June 30, 2025 (In millions) | September 30, 2024 (In millions) | | :-------------------------------- | :---------------------------- | :------------------------------- | | Cash and cash equivalents | $239 | $223 | | Total current assets | $1,573 | $1,605 | | Net property, plant and equipment | $1,672 | $1,534 | | Goodwill | $133 | $133 | | Total assets | $3,837 | $3,736 | Balance Sheet Liabilities and Equity Summary | Liability & Equity Category | June 30, 2025 (In millions) | September 30, 2024 (In millions) | | :---------------------------------- | :---------------------------- | :------------------------------- | | Total current liabilities | $740 | $772 | | Long-term debt | $1,105 | $1,087 | | Total Cabot Corporation stockholders' equity | $1,541 | $1,425 | | Total stockholders' equity | $1,683 | $1,590 | | Total liabilities and stockholders' equity | $3,837 | $3,736 | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This section outlines Cabot Corporation's unaudited consolidated statements of cash flows for the specified interim periods Cash Flow Summary | Cash Flow Activity | Nine Months Ended June 30, 2025 (In millions) | Nine Months Ended June 30, 2024 (In millions) | | :-------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Cash provided by (used in) operating activities | $446 | $488 | | Cash provided by (used in) investing activities | $(239) | $(146) | | Cash provided by (used in) financing activities | $(190) | $(326) | | Increase (decrease) in cash and cash equivalents | $16 | $(41) | | Cash and cash equivalents at end of period | $239 | $197 | [Consolidated Statements of Changes in Stockholders' Equity](index=8&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) This section presents Cabot Corporation's unaudited consolidated statements of changes in stockholders' equity Stockholders' Equity Changes (FY25) | Metric | Balance at September 30, 2024 (In millions) | Balance at June 30, 2025 (In millions) | | :------------------------------------ | :------------------------------------------ | :--------------------------------------- | | Total Cabot Corporation Stockholders' Equity | $1,425 | $1,541 | | Total Stockholders' Equity | $1,590 | $1,683 | Stockholders' Equity Changes (FY24) | Metric | Balance at September 30, 2023 (In millions) | Balance at June 30, 2024 (In millions) | | :------------------------------------ | :------------------------------------------ | :--------------------------------------- | | Total Cabot Corporation Stockholders' Equity | $1,264 | $1,346 | | Total Stockholders' Equity | $1,407 | $1,496 | [Notes to the Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) This section provides detailed notes to Cabot Corporation's unaudited consolidated financial statements [A. Basis of Presentation](index=10&type=section&id=A.%20Basis%20of%20Presentation) The consolidated financial statements are prepared in accordance with U.S. GAAP and reflect management's adjustments - The financial statements are unaudited and prepared in conformity with U.S. GAAP, including wholly-owned and majority-owned subsidiaries[26](index=26&type=chunk) - Interim results are not necessarily indicative of full fiscal year results[28](index=28&type=chunk) [B. Significant Accounting Policies](index=10&type=section&id=B.%20Significant%20Accounting%20Policies) This note details significant accounting policies, including Argentina's economy impact and recent FASB pronouncements - Argentina's highly inflationary economy resulted in foreign exchange losses of **$3 million** (Q3 FY25) and **$5 million** (9M FY25), compared to $2 million (Q3 FY24) and $42 million (9M FY24)[30](index=30&type=chunk) - In fiscal 2024, the Company purchased **$30 million** in BOPREAL bonds, selling them for $22 million, resulting in an **$8 million** investment loss[31](index=31&type=chunk) - The U.S. federal government enacted the One Big Beautiful Bill Act (OBBBA) on July 4, 2025, with impact on deferred tax assets being evaluated[32](index=32&type=chunk) - New FASB standards on Expense Disaggregation, Income Tax, and Reportable Segment Disclosures are being evaluated for their impact[33](index=33&type=chunk)[34](index=34&type=chunk)[35](index=35&type=chunk) [C. Acquisitions](index=11&type=section&id=C.%20Acquisitions) In October 2024, Cabot acquired assets and licensed technology for its Battery Materials product line for $27 million - In October 2024, the Company acquired assets and licensed technology for its Battery Materials product line for **$27 million**[36](index=36&type=chunk) - The acquisition cost was allocated as **$19 million** to property, plant and equipment and **$8 million** to intangible assets[36](index=36&type=chunk) [D. Goodwill and Intangible Assets](index=11&type=section&id=D.%20Goodwill%20and%20Intangible%20Assets) Goodwill remained stable, while intangible assets increased due to an acquisition, with related amortization expense Goodwill by Segment | Segment | Balance at September 30, 2024 (In millions) | Foreign Currency Impact (In millions) | Balance at June 30, 2025 (In millions) | | :-------------------- | :------------------------------------------ | :------------------------------------ | :--------------------------------------- | | Reinforcement Materials | $48 | $1 | $49 | | Performance Chemicals | $85 | $(1) | $84 | | Total Goodwill | $133 | $0 | $133 | Net Intangible Assets | Intangible Asset Type | Net Intangible Assets June 30, 2025 (In millions) | Net Intangible Assets September 30, 2024 (In millions) | | :-------------------------- | :------------------------------------------------ | :--------------------------------------------------- | | Developed technologies | $27 | $22 | | Trademarks | $1 | $1 | | Customer relationships | $28 | $30 | | Total Intangible Assets | $56 | $53 | - Amortization expense was **$2 million** for the three months ended June 30, 2025 (vs. $1 million in 2024) and **$5 million** for the nine months ended June 30, 2025 (vs. $4 million in 2024)[37](index=37&type=chunk) [E. Accumulated Other Comprehensive Income (Loss) ("AOCI")](index=12&type=section&id=E.%20Accumulated%20Other%20Comprehensive%20Income%20(Loss)%20(%22AOCI%22)) AOCI improved due to foreign currency translation, with minimal reclassifications to operations AOCI Components | AOCI Component | Balance at Sep 30, 2024 (In millions) | Balance at June 30, 2025 (In millions) | | :------------------------------------ | :------------------------------------ | :------------------------------------ | | Currency Translation Adjustment | $(342) | $(337) | | Pension and Other Post-retirement Benefit Liability Adjustments | $(18) | $(18) | | Total AOCI attributable to Cabot Corporation | $(360) | $(355) | - Other comprehensive income (loss) before reclassifications for the three months ended June 30, 2025, was **$76 million**, primarily from foreign currency translation adjustment[38](index=38&type=chunk) [F. Contingencies](index=13&type=section&id=F.%20Contingencies) Cabot maintains a reserve for respirator liabilities, acknowledging litigation unpredictability and potential material changes - Cabot holds a **$34 million** reserve at June 30, 2025 (vs. $35 million at Sep 30, 2024) for respirator liability claims[41](index=41&type=chunk) - The estimate for respirator liabilities is subject to significant uncertainties, with potential for material changes in the near term[42](index=42&type=chunk) - Other ordinary course lawsuits and claims are not expected to materially affect the Company's financial position[43](index=43&type=chunk) [G. Income Tax](index=14&type=section&id=G.%20Income%20Tax) Effective tax rates and income tax provisions are detailed, including discrete tax expenses and uncertain tax positions Income Tax Provision and Effective Tax Rate | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | (Provision) benefit for income taxes | $(43) million | $(40) million | $(133) million | $(121) million | | Effective tax rate | 28% | 25% | 29% | 31% | - The provision for income taxes included net discrete tax expense of **$1 million** for Q3 FY25 and **$10 million** for 9M FY25[44](index=44&type=chunk) - Cabot released uncertain tax positions of **$1 million** (Q3 FY25) and **$3 million** (9M FY25) due to statute of limitations expirations[49](index=49&type=chunk) [H. Earnings Per Share](index=15&type=section&id=H.%20Earnings%20Per%20Share) Basic and diluted EPS calculations are presented, accounting for participating securities entitled to dividend equivalents Earnings Per Share Data | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Basic EPS | $1.87 | $1.96 | $5.27 | $4.34 | | Diluted EPS | $1.86 | $1.94 | $5.22 | $4.30 | | Net income (loss) attributable to Cabot Corporation (numerator) | $101 million | $109 million | $288 million | $243 million | | Adjusted weighted average common shares (denominator) - Basic | 53.5 million | 55.1 million | 53.9 million | 55.3 million | | Adjusted weighted average common shares (denominator) - Diluted | 53.8 million | 55.7 million | 54.4 million | 55.8 million | - Participating securities, including unvested restricted stock units, are entitled to cash dividend equivalents[51](index=51&type=chunk) [I. Financial Instruments and Fair Value Measurements](index=16&type=section&id=I.%20Financial%20Instruments%20and%20Fair%20Value%20Measurements) Financial instruments are classified by fair value hierarchy, with cash as Level 1 and derivatives/debt as Level 2 - Cash and cash equivalents, accounts receivable, and payables approximate carrying values and are classified as **Level 1**[54](index=54&type=chunk) - Derivatives (net investment hedges, forward foreign currency contracts) and guaranteed investment contracts are classified as **Level 2** instruments, with fair values based on observable inputs[55](index=55&type=chunk)[57](index=57&type=chunk) - The fair value of long-term fixed rate debt was **$1.10 billion** at June 30, 2025 (carrying value $1.09 billion), classified as **Level 2**[58](index=58&type=chunk) [J. Supplier Financing Programs](index=17&type=section&id=J.%20Supplier%20Financing%20Programs) Cabot uses supplier financing programs, with outstanding obligations decreasing to $13 million at June 30, 2025 - Outstanding payment obligations under supplier financing programs were **$13 million** as of June 30, 2025, down from $16 million as of September 30, 2024[59](index=59&type=chunk) - These programs enable suppliers to sell receivables to third-party financial institutions for earlier payment[59](index=59&type=chunk) [K. Financial Information by Segment](index=17&type=section&id=K.%20Financial%20Information%20by%20Segment) Cabot's two reportable segments, Reinforcement Materials and Performance Chemicals, are analyzed by revenue and EBIT - Cabot operates two reportable segments: Reinforcement Materials (reinforcing carbons, engineered elastomer composites) and Performance Chemicals (specialty carbons, fumed metal oxides, battery materials, etc.)[61](index=61&type=chunk) Segment Revenue | Segment | Q3 FY25 Revenue (In millions) | Q3 FY24 Revenue (In millions) | 9M FY25 Revenue (In millions) | 9M FY24 Revenue (In millions) | | :-------------------- | :---------------------------- | :---------------------------- | :---------------------------- | :---------------------------- | | Reinforcement Materials | $573 | $649 | $1,778 | $1,966 | | Performance Chemicals | $320 | $332 | $942 | $928 | | Consolidated Total | $893 | $981 | $2,720 | $2,894 | Segment EBIT | Segment | Q3 FY25 EBIT (In millions) | Q3 FY24 EBIT (In millions) | 9M FY25 EBIT (In millions) | 9M FY24 EBIT (In millions) | | :-------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Reinforcement Materials | $128 | $136 | $389 | $414 | | Performance Chemicals | $57 | $55 | $152 | $120 | | Consolidated Total | $185 | $191 | $541 | $534 | Consolidated Revenue by Geographic Region | Geographic Region | Q3 FY25 Consolidated Revenue (In millions) | Q3 FY24 Consolidated Revenue (In millions) | 9M FY25 Consolidated Revenue (In millions) | 9M FY24 Consolidated Revenue (In millions) | | :-------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | | Americas | $328 | $368 | $997 | $1,077 | | Asia Pacific | $331 | $377 | $1,059 | $1,132 | | Europe, Middle East and Africa | $234 | $236 | $664 | $685 | | Net sales and other operating revenues | $923 | $1,016 | $2,814 | $2,993 | [L. Subsequent Event](index=20&type=section&id=L.%20Subsequent%20Event) Cabot agreed to acquire Bridgestone's carbon black facility in Mexico for $70 million, expected to close in fiscal 2026 - On August 4, 2025, Cabot agreed to purchase Bridgestone Corporation's carbon black manufacturing facility in Mexico for approximately **$70 million**[69](index=69&type=chunk) - The acquisition is expected to close in the first half of fiscal 2026, subject to regulatory approval[69](index=69&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Cabot's financial condition, operating results, liquidity, and forward-looking statements [Recently Issued Accounting Pronouncements](index=21&type=section&id=Recently%20Issued%20Accounting%20Pronouncements) This section refers to Note B for details on recently issued accounting pronouncements - Refer to Note B for details on recent accounting pronouncements[71](index=71&type=chunk) [Results of Operations](index=21&type=section&id=Results%20of%20Operations) This section analyzes Cabot's operational performance, including consolidated and segment-specific financial results and non-GAAP measures [Definition of Terms and Non-GAAP Financial Measures](index=21&type=section&id=Definition%20of%20Terms%20and%20Non-GAAP%20Financial%20Measures) Key terms and non-GAAP financial measures like 'operating tax rate' and 'Total segment EBIT' are defined for performance evaluation - The 'operating tax rate' is a non-GAAP measure excluding specific tax items and timing of losses[74](index=74&type=chunk) - 'Total segment EBIT' is a non-GAAP measure used by management to evaluate segment operating results and allocate resources[75](index=75&type=chunk) - Management believes Total segment EBIT provides useful supplemental information for investors[75](index=75&type=chunk) [Overview](index=22&type=section&id=Overview) Income before income taxes decreased in Q3 FY25 due to lower Reinforcement Materials EBIT, partially offset by other factors - Income (loss) before income taxes and equity in earnings of affiliated companies decreased in Q3 FY25 compared to Q3 FY24[78](index=78&type=chunk) - The decrease was primarily due to lower Reinforcement Materials EBIT, partially offset by lower unallocated corporate costs and higher Performance Chemicals EBIT[78](index=78&type=chunk) [Third quarter of Fiscal 2025 versus Third quarter of Fiscal 2024—Consolidated](index=22&type=section&id=Third%20quarter%20of%20Fiscal%202025%20versus%20Third%20quarter%20of%20Fiscal%202024%E2%80%94Consolidated) Consolidated results show decreased net sales and gross profit in Q3, but increased net income for 9M, influenced by Argentina losses [Net Sales and Other Operating Revenues and Gross Profit](index=22&type=section&id=Net%20Sales%20and%20Other%20Operating%20Revenues%20and%20Gross%20Profit) Net sales and gross profit decreased in Q3 FY25 due to lower volumes and less favorable pricing/product mix Consolidated Revenue and Gross Profit | Metric | Three Months Ended June 30, 2025 (In millions) | Three Months Ended June 30, 2024 (In millions) | Nine Months Ended June 30, 2025 (In millions) | Nine Months Ended June 30, 2024 (In millions) | | :----------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Net sales and other operating revenues | $923 | $1,016 | $2,814 | $2,993 | | Gross profit | $244 | $256 | $720 | $720 | - Net sales and other operating revenues decreased by **$93 million** (Q3 FY25 vs. Q3 FY24) and **$179 million** (9M FY25 vs. 9M FY24)[79](index=79&type=chunk) - Q3 FY25 revenue decrease was driven by lower volumes in both segments (**$66 million**) and less favorable pricing/product mix in Reinforcement Materials (**$27 million**)[80](index=80&type=chunk) - 9M FY25 revenue decrease was due to lower Reinforcement Materials volumes (**$94 million**), less favorable pricing/product mix (**$92 million**), and unfavorable foreign currency translation (**$23 million**)[81](index=81&type=chunk) - Gross profit decreased by **$12 million** in Q3 FY25 due to lower volumes (**$25 million**), partially offset by higher gross profit per ton (**$9 million**)[82](index=82&type=chunk)[83](index=83&type=chunk) [Selling and Administrative Expenses](index=24&type=section&id=Selling%20and%20Administrative%20Expenses) Selling and administrative expenses decreased in Q3 and 9M FY25 due to effective cost management efforts Selling and Administrative Expenses | Metric | Three Months Ended June 30, 2025 (In millions) | Three Months Ended June 30, 2024 (In millions) | Nine Months Ended June 30, 2025 (In millions) | Nine Months Ended June 30, 2024 (In millions) | | :-------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Selling and administrative expenses | $62 | $68 | $192 | $210 | - Selling and administrative expenses decreased by **$6 million** (Q3 FY25) and **$18 million** (9M FY25) due to cost management efforts[84](index=84&type=chunk) [Research and Technical Expenses](index=24&type=section&id=Research%20and%20Technical%20Expenses) Research and technical expenses decreased in both Q3 and 9M FY25, reflecting cost control measures Research and Technical Expenses | Metric | Three Months Ended June 30, 2025 (In millions) | Three Months Ended June 30, 2024 (In millions) | Nine Months Ended June 30, 2025 (In millions) | Nine Months Ended June 30, 2024 (In millions) | | :---------------------------- | :--------------------------------------------- | :--------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Research and technical expenses | $15 | $16 | $44 | $46 | - Research and technical expenses decreased by **$1 million** in Q3 FY25 and **$2 million** in 9M FY25[85](index=85&type=chunk) [Interest and Dividend Income, Interest Expense and Other Income (Expense)](index=24&type=section&id=Interest%20and%20Dividend%20Income,%20Interest%20Expense%20and%20Other%20Income%20(Expense)) Interest and dividend income decreased, while interest expense was flat in Q3 and decreased in 9M, with improved other income Interest and Other Income/Expense | Metric | Three Months Ended June 30, 2025 (In millions) | Three Months Ended June 30, 2024 (In millions) | Nine Months Ended June 30, 2025 (In millions) | Nine Months Ended June 30, 2024 (In millions) | | :-------------------------- | :--------------------------------------------- | :--------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Interest and dividend income | $7 | $8 | $20 | $25 | | Interest expense | $(19) | $(19) | $(56) | $(62) | | Other income (expense) | $0 | $(3) | $2 | $(33) | - Interest and dividend income decreased by **$1 million** (Q3 FY25) and **$5 million** (9M FY25) due to lower average interest rates[86](index=86&type=chunk) - Interest expense remained flat in Q3 FY25 and decreased by **$6 million** in 9M FY25 due to lower average interest rates on short-term borrowings[87](index=87&type=chunk) - Other income (expense) improved by **$3 million** (Q3 FY25) and **$35 million** (9M FY25) primarily due to lower foreign exchange losses in Argentina[88](index=88&type=chunk) [(Provision) Benefit for Income Taxes and Reconciliation of Effective Tax Rate to Operating Tax Rate](index=25&type=section&id=(Provision)%20Benefit%20for%20Income%20Taxes%20and%20Reconciliation%20of%20Effective%20Tax%20Rate%20to%20Operating%20Tax%20Rate) Effective tax rates and provisions are detailed, with the operating tax rate expected to be 27% to 29% for fiscal 2025 Income Tax Rates | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Effective tax rate | 28% | 25% | 29% | 31% | | Operating tax rate | 28% | 27% | 28% | 28% | - The Q3 FY25 tax provision was **$43 million** (vs. $40 million in Q3 FY24), primarily due to the mix of earnings[89](index=89&type=chunk) - The 9M FY25 tax provision was **$133 million** (vs. $121 million in 9M FY24), primarily due to higher earnings[90](index=90&type=chunk) - The Company expects its fiscal 2025 Operating tax rate to be in the range of **27% to 29%**[91](index=91&type=chunk) [Net Income (Loss) Attributable to Noncontrolling Interests](index=25&type=section&id=Net%20Income%20(Loss)%20Attributable%20to%20Noncontrolling%20Interests) Equity in earnings from affiliates decreased in Q3, while net income attributable to noncontrolling interests varied Noncontrolling Interests Data | Metric | Three Months Ended June 30, 2025 (In millions) | Three Months Ended June 30, 2024 (In millions) | Nine Months Ended June 30, 2025 (In millions) | Nine Months Ended June 30, 2024 (In millions) | | :------------------------------------------------ | :--------------------------------------------- | :--------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Equity in earnings of affiliated companies, net of tax | $1 | $2 | $5 | $5 | | Net income (loss) attributable to noncontrolling interests, net of tax | $12 | $11 | $34 | $35 | - Equity in earnings of affiliated companies, net of tax, decreased by **$1 million** in Q3 FY25 due to lower profitability of the Venezuelan affiliate[92](index=92&type=chunk) - Net income attributable to noncontrolling interests increased by **$1 million** in Q3 FY25 but decreased by **$1 million** in 9M FY25[93](index=93&type=chunk) [Net Income Attributable to Cabot Corporation](index=26&type=section&id=Net%20Income%20Attributable%20to%20Cabot%20Corporation) Net income attributable to Cabot Corporation decreased in Q3 but increased in 9M, influenced by segment EBIT and Argentina losses Net Income and Diluted EPS | Metric | Three Months Ended June 30, 2025 (In millions) | Three Months Ended June 30, 2024 (In millions) | Nine Months Ended June 30, 2025 (In millions) | Nine Months Ended June 30, 2024 (In millions) | | :----------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Net income (loss) attributable to Cabot Corporation | $101 | $109 | $288 | $243 | | Diluted EPS | $1.86 | $1.94 | $5.22 | $4.30 | - Net income attributable to Cabot Corporation decreased by **$8 million** in Q3 FY25, primarily due to lower Reinforcement Materials Segment EBIT[94](index=94&type=chunk) - Net income attributable to Cabot Corporation increased by **$45 million** in 9M FY25, primarily due to lower Argentina controlled currency devaluation and other losses[95](index=95&type=chunk) [Third quarter of Fiscal 2025 versus Third quarter of Fiscal 2024—By Business Segment](index=26&type=section&id=Third%20quarter%20of%20Fiscal%202025%20versus%20Third%20quarter%20of%20Fiscal%202024%E2%80%94By%20Business%20Segment) Segment performance shows decreased Reinforcement Materials sales/EBIT and varied Performance Chemicals results, with certain items excluded [Certain Items](index=26&type=section&id=Certain%20Items) Certain items, excluded from segment results, totaled $(3) million in Q3 FY25 and $(13) million in 9M FY25 Certain Items Impact | Certain Item | Three Months Ended June 30, 2025 (In millions) | Three Months Ended June 30, 2024 (In millions) | Nine Months Ended June 30, 2025 (In millions) | Nine Months Ended June 30, 2024 (In millions) | | :------------------------------------------------ | :--------------------------------------------- | :--------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Global restructuring activities | $(3) | $(1) | $(6) | $(13) | | Legal and environmental matters and reserve | $0 | $0 | $(6) | $(1) | | Argentina controlled currency devaluation and other losses | $0 | $(2) | $0 | $(43) | | Other certain items | $0 | $1 | $(1) | $1 | | Total certain items | $(3) | $(2) | $(13) | $(56) | - Certain items, which management excludes from ongoing segment results, totaled **$(3) million** in Q3 FY25 and **$(13) million** in 9M FY25[98](index=98&type=chunk) - A significant decrease in Argentina controlled currency devaluation and other losses from **$(43) million** (9M FY24) to **$0** (9M FY25) was a key factor[98](index=98&type=chunk) [Other Unallocated Items](index=26&type=section&id=Other%20Unallocated%20Items) Total other unallocated items decreased in Q3 and 9M FY25, primarily due to lower corporate costs Other Unallocated Items Impact | Other Unallocated Item | Three Months Ended June 30, 2025 (In millions) | Three Months Ended June 30, 2024 (In millions) | Nine Months Ended June 30, 2025 (In millions) | Nine Months Ended June 30, 2024 (In millions) | | :------------------------------------------------ | :--------------------------------------------- | :--------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Interest expense | $(19) | $(19) | $(56) | $(62) | | Unallocated corporate costs | $(13) | $(16) | $(39) | $(51) | | General unallocated income (expense) | $6 | $6 | $22 | $34 | | Less: Equity in earnings of affiliated companies, net of tax | $1 | $2 | $5 | $5 | | Total other unallocated items | $(27) | $(31) | $(78) | $(84) | - Total other unallocated items decreased by **$4 million** in Q3 FY25 and **$6 million** in 9M FY25, primarily due to lower unallocated corporate costs and general unallocated income (expense)[98](index=98&type=chunk)[99](index=99&type=chunk) [Reinforcement Materials](index=27&type=section&id=Reinforcement%20Materials) Reinforcement Materials sales and EBIT decreased due to lower volumes and less favorable pricing/product mix Reinforcement Materials Performance | Metric | Three Months Ended June 30, 2025 (In millions) | Three Months Ended June 30, 2024 (In millions) | Nine Months Ended June 30, 2025 (In millions) | Nine Months Ended June 30, 2024 (In millions) | | :-------------------------- | :--------------------------------------------- | :--------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Reinforcement Materials Sales | $573 | $649 | $1,778 | $1,966 | | Reinforcement Materials EBIT | $128 | $136 | $389 | $414 | - Q3 FY25 sales decreased by **$76 million** due to lower volumes (**$51 million**) and less favorable pricing/product mix (**$27 million**), driven by lower customer demand in Americas and Asia Pacific[101](index=101&type=chunk) - 9M FY25 sales decreased by **$188 million** due to lower volumes (**$94 million**), less favorable pricing/product mix (**$66 million**), and unfavorable foreign currency translation (**$23 million**)[102](index=102&type=chunk) - Q3 FY25 EBIT decreased by **$8 million** due to lower volumes (**$21 million**), partially offset by lower selling and administrative expenses (**$6 million**) and higher gross profit per ton (**$5 million**)[103](index=103&type=chunk) - For Q4 FY25, Reinforcement Materials EBIT is expected to modestly decline due to higher sequential costs, partially offset by higher volumes in Asia Pacific[105](index=105&type=chunk) [Performance Chemicals](index=27&type=section&id=Performance%20Chemicals) Performance Chemicals sales decreased in Q3 but EBIT increased due to higher gross profit per ton and cost management Performance Chemicals Performance | Metric | Three Months Ended June 30, 2025 (In millions) | Three Months Ended June 30, 2024 (In millions) | Nine Months Ended June 30, 2025 (In millions) | Nine Months Ended June 30, 2024 (In millions) | | :---------------------------- | :--------------------------------------------- | :--------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Performance Chemicals Sales | $320 | $332 | $942 | $928 | | Performance Chemicals EBIT | $57 | $55 | $152 | $120 | - Q3 FY25 sales decreased by **$12 million** due to lower volumes (**$15 million**), partially offset by favorable foreign currency translation (**$3 million**), mainly from lower customer demand in auto-related applications[106](index=106&type=chunk) - 9M FY25 sales increased by **$14 million** due to higher volumes (**$35 million**), primarily in fumed metal oxides, partially offset by less favorable pricing/product mix (**$25 million**)[107](index=107&type=chunk)[108](index=108&type=chunk) - Q3 FY25 EBIT increased by **$2 million** due to higher gross profit per ton (**$4 million**) from cost management, targeted price increases, and optimization[109](index=109&type=chunk) - Dow's cessation of polysiloxane operations by mid-2026 will impact chlorosilane feedstock supply, with discussions ongoing[111](index=111&type=chunk) - For Q4 FY25, Performance Chemicals EBIT is expected to decline due to lower seasonal volumes and higher sequential costs[112](index=112&type=chunk) [Liquidity and Capital Resources](index=28&type=section&id=Liquidity%20and%20Capital%20Resources) Cabot's liquidity decreased in 9M FY25, with cash flows from operating, investing, and financing activities detailed [Overview](index=28&type=section&id=Overview) Liquidity decreased by $36 million in 9M FY25, with $239 million cash and $1.1 billion borrowing availability - Liquidity, measured by cash and borrowing availability, decreased by **$36 million** in 9M FY25[113](index=113&type=chunk) - As of June 30, 2025, the Company had **$239 million** in cash and cash equivalents and **$1.1 billion** in borrowing availability under revolving credit agreements[113](index=113&type=chunk) - Cabot complied with debt covenants, requiring a consolidated net debt to consolidated EBITDA ratio not to exceed **3.50 to 1.00**[114](index=114&type=chunk) - The Company uses U.S. earnings, foreign repatriations, commercial paper, and U.S. Credit Agreement borrowings to meet U.S. cash needs[115](index=115&type=chunk) [Cash Flows from Operating Activities](index=29&type=section&id=Cash%20Flows%20from%20Operating%20Activities) Cash provided by operating activities decreased by $42 million in 9M FY25, driven by business earnings and working capital Operating Cash Flow | Metric | Nine Months Ended June 30, 2025 (In millions) | Nine Months Ended June 30, 2024 (In millions) | | :-------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Cash provided by (used in) operating activities | $446 | $488 | - Cash provided by operating activities decreased by **$42 million** in 9M FY25, driven by business earnings, depreciation/amortization (**$114 million**), cash dividends from equity investments (**$13 million**), and an increase in net working capital (**$13 million**)[121](index=121&type=chunk) [Cash Flows from Investing Activities](index=29&type=section&id=Cash%20Flows%20from%20Investing%20Activities) Investing activities consumed $239 million in 9M FY25, primarily for capital expenditures and an asset acquisition Investing Cash Flow | Metric | Nine Months Ended June 30, 2025 (In millions) | Nine Months Ended June 30, 2024 (In millions) | | :-------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Cash provided by (used in) investing activities | $(239) | $(146) | - Investing activities consumed **$239 million** in 9M FY25, including **$210 million** for capital expenditures and **$27 million** for an asset acquisition[124](index=124&type=chunk) - Capital expenditures for fiscal 2025 are expected to be between **$250 million** and **$275 million**[125](index=125&type=chunk) [Cash Flows from Financing Activities](index=29&type=section&id=Cash%20Flows%20from%20Financing%20Activities) Financing activities consumed $190 million in 9M FY25, mainly for share repurchases and dividends Financing Cash Flow | Metric | Nine Months Ended June 30, 2025 (In millions) | Nine Months Ended June 30, 2024 (In millions) | | :-------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Cash provided by (used in) financing activities | $(190) | $(326) | - Financing activities consumed **$190 million** in 9M FY25, primarily due to share repurchases (**$129 million**), dividends to stockholders (**$71 million**), and dividends to noncontrolling interests (**$57 million**)[127](index=127&type=chunk) - In 9M FY24, financing activities consumed **$326 million**, mainly from commercial paper repayment (**$123 million**), share repurchases (**$106 million**), and dividends (**$69 million** to stockholders, **$27 million** to noncontrolling interests)[128](index=128&type=chunk) [Forward-Looking Information](index=30&type=section&id=Forward-Looking%20Information) Forward-looking statements regarding future performance are subject to various risks and uncertainties beyond the Company's control - The report contains forward-looking statements about future business performance, including EBIT, volumes, costs, and the impact of the OBBBA and the relationship with Dow[129](index=129&type=chunk) - Forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties, and other factors beyond the Company's control[130](index=130&type=chunk) - Key risk factors include industry competition, safety/health/environmental requirements, climate change risks, volatility in energy/raw material prices, customer/joint venture relationships, new product growth, economic conditions, litigation, interest/tax rates, and currency fluctuations[131](index=131&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=30&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Market risk disclosures for Q3 FY25 are consistent with those in the 2024 10-K, with no material changes - Market risk disclosures for the period ended June 30, 2025, are consistent with those in the 2024 10-K[132](index=132&type=chunk) [Item 4. Controls and Procedures](index=30&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls were effective as of June 30, 2025, with no material changes to internal controls during the quarter - Disclosure controls and procedures were evaluated and deemed effective as of June 30, 2025[133](index=133&type=chunk) - No material changes to internal controls over financial reporting occurred during the quarter ended June 30, 2025[134](index=134&type=chunk) [Part II. Other Information](index=30&type=section&id=Part%20II.%20Other%20Information) This part contains other information, including equity security sales, other disclosures, exhibits, and signatures [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=30&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Cabot repurchased 533,333 shares in Q3 FY25, with significant remaining authorization for future repurchases Share Repurchase Activity | Period | Total Number of Shares Purchased | Average Price Paid per Share | | :-------------------------- | :------------------------------- | :--------------------------- | | May 1, 2025 - May 31, 2025 | 510,000 | $75.06 | | June 1, 2025 - June 30, 2025 | 23,333 | $73.74 | | Total | 533,333 | - | - As of June 30, 2025, **9,955,759 shares** may yet be purchased under publicly announced plans or programs[135](index=135&type=chunk) - The Board of Directors authorized additional repurchases of **ten million shares** on July 13, 2018, and December 3, 2024, with no set expiration dates[137](index=137&type=chunk) [Item 5. Other Information](index=31&type=section&id=Item%205.%20Other%20Information) No directors or officers engaged in Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q3 FY25 - No directors or officers entered into, modified, or terminated Rule 10b5-1 trading arrangements or non-Rule 10b5-1 trading arrangements during the quarter ended June 30, 2025[136](index=136&type=chunk) [Item 6. Exhibits](index=31&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including corporate governance documents and executive certifications - The exhibits include corporate governance documents (Restated Certificate of Incorporation, By-laws), certifications from the Principal Executive Officer and Principal Financial Officer, and Inline XBRL documents[138](index=138&type=chunk) [SIGNATURES](index=33&type=section&id=SIGNATURES) The report is signed by Cabot Corporation's EVP and CFO, and VP, Chief Accounting Officer and Controller, on August 5, 2025 - The report is signed by Erica McLaughlin, Executive Vice President and Chief Financial Officer, and Lisa M. Dumont, Vice President, Chief Accounting Officer and Controller[144](index=144&type=chunk) - The signing date for the report is August 5, 2025[144](index=144&type=chunk)

Financial Data and Key Metrics Changes - The company reported Q3 adjusted earnings per share of $1.90, which is down 1% compared to the same period last year and in line with Q2 results [6][17] - Operating cash flow for the quarter was strong at $249 million, which included a working capital decrease of $101 million [17][18] - Discretionary free cash flow was $114 million, with a cash balance of $239 million at the end of the quarter [18] Business Segment Data and Key Metrics Changes - EBIT for Reinforcement Materials was $128 million, a decrease of $8 million year over year, primarily due to an 8% decline in global volumes [19][20] - Performance Chemicals saw EBIT increase by $2 million year over year, driven by higher gross profit per ton despite an 8% decline in global volumes [21][22] Market Data and Key Metrics Changes - In the Americas, volumes for Reinforcement Materials were down 9% year over year, with Asia Pacific down 11% and Europe up 4% [20] - The battery materials segment increased contribution margin by 20% compared to the same period last year, with a focus on differentiating products for the EV market [11][12] Company Strategy and Development Direction - The company announced the acquisition of Bridgestone's reinforcing carbons plant in Mexico for $70 million, which is expected to be accretive in the first year [8][9] - Sustainability remains a core focus, with the company receiving a platinum rating from EcoVadis for the fifth consecutive year, placing it among the top 1% of companies in the basic chemicals manufacturing sector [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate the challenging macroeconomic environment, reaffirming the full-year adjusted earnings per share guidance of $7.15 to $7.50 [27][29] - The company is focused on executing its operating platform of commercial and operational excellence to address uncertainties from tariffs and global demand [28][29] Other Important Information - Capital expenditures for the fiscal year are expected to be between $250 million to $275 million, with $61 million spent in Q3 [18][25] - The company plans to repurchase between $150 million to $200 million of shares in fiscal 2025 [25][24] Q&A Session Summary Question: Relationship between tariffs and demand in North America - Management discussed the dynamic nature of tariffs, noting that passenger car tires from Southeast Asia have tariffs in the 19% to 29% range, while those from China are around 70% [34][35] Question: Differences in volumes between North America and South America - Volumes in the Americas were down 9%, with North America and South America experiencing different impacts due to market conditions and contract season losses [42][43] Question: Impact of tariffs on tire imports and local production - Management indicated that tariffs are expected to enhance the competitiveness of local production, although the timing and magnitude of these effects are uncertain [36][54] Question: Carbon black price negotiations in North America - Early stages of contract negotiations for carbon black prices are underway, following typical seasonal patterns [48] Question: Inventory levels in the tire market - Management noted that tire inventories appear balanced, with some budget brands having elevated levels, but overall, the situation seems to be stabilizing [52][53] Question: Operating leverage from network optimization initiatives - Management explained that network optimization efforts are broad and aimed at improving product mix and cost efficiency, which should favorably impact operating leverage [61][62]

Financial Data and Key Metrics Changes - The company reported Q3 adjusted earnings per share of $1.9, which was down 1% compared to the same period last year and in line with Q2 results [6][16] - Operating cash flow for the quarter was strong at $249 million, funding capital expenditures and enabling $64 million returned to shareholders [7][17] - The company’s cash balance at the end of the quarter was $239 million, with a liquidity position of approximately $1.4 billion [17] Business Segment Data and Key Metrics Changes - Reinforcement Materials segment EBIT was $128 million, down $8 million year over year, primarily due to an 8% decline in global volumes [18][19] - Performance Chemicals segment EBIT increased by $2 million year over year, driven by higher gross profit per ton, despite an 8% decline in global volumes [20] Market Data and Key Metrics Changes - Volumes in Asia Pacific were down 11%, while volumes in The Americas decreased by 9%, with Europe experiencing a 4% increase [19] - The battery materials segment saw a 20% increase in contribution margin compared to the same period last year, with a focus on differentiating products for the EV market [11][12] Company Strategy and Development Direction - The company announced an acquisition of Bridgestone's reinforcing carbons plant in Mexico for $70 million, expected to be accretive in the first year [7][9] - Sustainability is a core focus, with the company receiving a platinum rating from EcoVadis for its sustainability leadership [10] - The company aims to build a leadership position in battery materials, targeting high-value segments in both China and Western economies [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate a challenging macroeconomic environment, reaffirming the full-year EPS guidance of $7.15 to $7.5 [27][29] - The company is focused on executing operational excellence and optimizing its supply chain to mitigate the impacts of tariffs and lower demand [28][29] Other Important Information - The company expects to maintain a competitive dividend yield and has plans for share repurchases between $150 million to $200 million in fiscal 2025 [25][29] - The company has completed a new unit in Indonesia and expanded CNT capacity in China, supporting its growth strategy [25] Q&A Session Summary Question: Relationship between tariffs and demand in North America - Management discussed the dynamic nature of tariffs, noting that passenger car tires from Southeast Asia have tariffs in the 19% to 29% range, while those from China are around 70% [34][35] Question: Volume differences in The Americas - Management confirmed that volumes in The Americas were down 9% year over year, with North America and South America experiencing different market conditions [41][42] Question: Impact of tariffs on inventory levels - Management indicated that tire inventories appear balanced, with some budget brands having elevated levels, but overall, the situation seems to be stabilizing [54][55] Question: Network optimization initiatives - Management explained that network optimization efforts are broad and aimed at improving product mix and cost efficiency, which should favorably impact operating leverage [63][66] Question: Corporate cost reductions - Management attributed a $12 million improvement in unallocated corporate costs to a mix of headcount actions and lower third-party spending [69][70] Question: Carbon black volumes in The Americas - Management noted that elevated tire imports have negatively impacted local production levels, but there are signs of stabilization and potential improvement in the future [73][75]

Financial Performance - Diluted EPS was $1.86, while adjusted EPS was $1.90, a decrease of 1% year-over-year[5] - Performance Chemicals segment EBIT reached $57 million, showing a 4% increase year-over-year[5] - Reinforcement Materials segment EBIT amounted to $128 million, a decrease of 6% year-over-year[5] - The company returned $64 million to shareholders through dividends and share repurchases[5] - Cash flow from operations was $249 million, with free cash flow of $188 million[22] - The company expects capital expenditures for fiscal year 2025 to be in the range of $250 million to $275 million[22] Strategic Initiatives - An agreement was announced to acquire Bridgestone's reinforcing carbons plant in Mexico for $70 million[7, 11] - Cabot was awarded a platinum rating from EcoVadis for exceptional sustainability performance for the fifth consecutive year, ranking in the top 1% of companies assessed by EcoVadis globally[8, 14] - Notable growth was achieved in Battery Materials, with a 20% contribution margin improvement driven by differentiated products[7, 15] Outlook - The company reaffirms its adjusted EPS guidance range of $7.15 to $7.50 for fiscal year 2025[38, 41, 46]

Core Insights - Cabot (CBT) reported quarterly earnings of $1.9 per share, exceeding the Zacks Consensus Estimate of $1.8 per share, but down from $1.92 per share a year ago, indicating a slight year-over-year decline [1] - The company posted revenues of $923 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 4.09% and down from $1.02 billion year-over-year [2] - Cabot shares have declined approximately 21.2% year-to-date, contrasting with the S&P 500's gain of 6.1% [3] Earnings Performance - Over the last four quarters, Cabot has surpassed consensus EPS estimates two times [2] - The recent earnings surprise of +5.56% indicates a positive deviation from expectations, while the previous quarter's surprise was +2.15% [1][2] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $1.79, with projected revenues of $984.79 million, and for the current fiscal year, the EPS estimate is $7.25 on revenues of $3.83 billion [7] - The estimate revisions trend for Cabot was unfavorable prior to the earnings release, resulting in a Zacks Rank 4 (Sell) for the stock, suggesting expected underperformance in the near future [6] Industry Context - The Chemical - Diversified industry, to which Cabot belongs, is currently ranked in the bottom 6% of over 250 Zacks industries, indicating a challenging environment [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Cabot's stock performance [5]

[Executive Summary & Q3 FY25 Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Q3%20FY25%20Highlights) Cabot Corporation reported Q3 FY25 diluted EPS of $1.86 and adjusted EPS of $1.90, with strong operating cash flow and balance sheet strength despite a challenging demand environment [Q3 FY25 Financial Highlights](index=1&type=section&id=Q3%20FY25%20Financial%20Highlights) Cabot Corporation reported Q3 FY25 diluted EPS of $1.86 and adjusted EPS of $1.90, representing a 1% decrease in Adjusted EPS compared to the prior year. Net sales and other operating revenues decreased to $923 million from $1,016 million in Q3 FY24 | Metric | Q3 FY25 | Q3 FY24 | 9 Months FY25 | 9 Months FY24 | | :---------------------------------- | :------ | :------ | :------------ | :------------ | | Net sales and other operating revenues (million USD) | $923 M | $1,016 M | $2,814 M | $2,993 M | | Net income attributable to Cabot Corp. (million USD) | $101 M | $109 M | $288 M | $243 M | | Net earnings per share (Diluted) (USD) | $1.86 | $1.94 | $5.22 | $4.30 | | Adjusted EPS (USD) | $1.90 | $1.92 | $5.56 | $5.25 | - Adjusted EPS of **$1.90** represents a **1% decrease** compared to the same quarter in the prior year[4](index=4&type=chunk) - Reinforcement Materials segment EBIT was **$128 million**, down **6%** compared to the same quarter in the prior year[4](index=4&type=chunk) - Performance Chemicals segment EBIT was **$57 million**, up **4%** compared to the same quarter in the prior year[4](index=4&type=chunk) [CEO Commentary](index=1&type=section&id=CEO%20Commentary) CEO Sean Keohane highlighted strong Q3 financial performance despite a challenging demand environment, attributing it to disciplined execution, focus on managing pricing and costs, and leveraging the global footprint. He noted strong operating cash flow and balance sheet strength - Management remains focused on managing pricing and costs and leveraging its global footprint to adeptly respond to uncertainty from tariffs and a weaker global macroeconomic environment[6](index=6&type=chunk) - The company delivered strong operating cash flow of **$249 million** and returned **$64 million** of cash to shareholders through **$24 million** in dividends and **$40 million** in share repurchases[6](index=6&type=chunk) - Balance sheet strength is reflected in a Net Debt to EBITDA ratio of **1.3x** and liquidity of **$1.4 billion**[6](index=6&type=chunk) [Detailed Financial Performance](index=2&type=section&id=Detailed%20Financial%20Performance) This section details Cabot Corporation's Q3 FY25 financial results, including overall net income, segment-specific EBIT performance, cash flow generation, and tax expenses [Overall Financial Detail](index=2&type=section&id=Overall%20Financial%20Detail) For Q3 FY25, net income attributable to Cabot Corporation was $101 million ($1.86 per diluted common share), with Adjusted EPS at $1.90 per share, after a $0.04 per share charge from certain items | Metric | Q3 FY25 | | :--------------------------------------- | :------ | | Net income attributable to Cabot Corporation (million USD) | $101 M | | Diluted common share (USD) | $1.86 | | After-tax per share charge from certain items (USD) | $0.04 | | Adjusted EPS (USD) | $1.90 | [Segment Results](index=2&type=section&id=Segment%20Results) Reinforcement Materials EBIT decreased by $8 million (6%) due to lower volumes in Asia Pacific and the Americas, while Performance Chemicals EBIT increased by $2 million (4%) driven by higher gross profit per ton from cost savings, despite 8% lower volumes [Reinforcement Materials](index=2&type=section&id=Reinforcement%20Materials) Reinforcement Materials segment experienced an EBIT decrease of $8 million (6%) primarily due to lower volumes across Asia Pacific and the Americas - EBIT in Reinforcement Materials decreased by **$8 million (6%)** compared to Q3 FY24[8](index=8&type=chunk) - The decrease in EBIT was primarily driven by lower volumes in Asia Pacific and the Americas[8](index=8&type=chunk) | Region | Year-over-Year Change (Volumes) | | :-------------------------- | :------------------------------ | | Global Reinforcement Materials | (8%) | | Asia Pacific | (11%) | | Europe, Middle, Africa | 4% | | Americas | (9%) | [Performance Chemicals](index=2&type=section&id=Performance%20Chemicals) Performance Chemicals segment saw a $2 million (4%) EBIT increase, driven by higher gross profit per ton from cost savings despite an 8% decline in volumes - EBIT in Performance Chemicals increased by **$2 million (4%)** compared to Q3 FY24[8](index=8&type=chunk) - The increase was primarily due to higher gross profit per ton, partially offset by **8% lower volumes**[8](index=8&type=chunk) - Higher gross profit per ton was primarily due to cost savings measures and optimization initiatives[8](index=8&type=chunk) - Lower volumes were due to lower customer demand driven by uncertainty from tariffs and a weaker global macroeconomic environment, particularly in auto-related applications[8](index=8&type=chunk) [Cash Performance](index=2&type=section&id=Cash%20Performance) Cabot Corporation ended Q3 FY25 with a cash balance of $239 million. Operating activities generated $249 million in cash, while capital expenditures were $61 million. The company returned $64 million to shareholders through $24 million in dividends and $40 million in share repurchases | Metric | Q3 FY25 | | :-------------------------------- | :------ | | Cash balance (end of quarter) (million USD) | $239 M | | Cash flows from operating activities (million USD) | $249 M | | Capital expenditures (million USD) | $61 M | | Dividends paid (million USD) | $24 M | | Share repurchases (million USD) | $40 M | [Taxes](index=3&type=section&id=Taxes) The company recorded a tax expense of $43 million in Q3 FY25, with an effective tax rate of 28%. The operating tax rate for fiscal year 2025 is projected to be between 27% and 29% | Metric | Q3 FY25 | | :------------------ | :------ | | Tax expense (million USD) | $43 M | | Effective tax rate (%) | 28% | - The operating tax rate for fiscal 2025 is expected to be in the range of **27% to 29%**[11](index=11&type=chunk) [Outlook and Corporate Information](index=3&type=section&id=Outlook%20and%20Corporate%20Information) This section outlines Cabot Corporation's fiscal year 2025 Adjusted EPS guidance, provides an overview of the company, and details the nature of forward-looking statements [Fiscal Year 2025 Outlook](index=3&type=section&id=Fiscal%20Year%202025%20Outlook) Cabot reaffirms its Adjusted EPS guidance for fiscal 2025 at $7.15 to $7.50. Due to lower customer demand from tariffs and macroeconomic uncertainty, particularly in the second half, the company expects to be in the middle to lower end of this range, with potential for higher if recent tariff announcements boost Q4 demand - Reaffirms Adjusted Earnings Per Share guidance for fiscal 2025 of **$7.15 to $7.50**[12](index=12&type=chunk) - Expects to be in the **middle to lower end** of the guidance range due to lower volumes in both Reinforcement Materials and Performance Chemicals segments in the second half of fiscal 2025[12](index=12&type=chunk) - If more recent announcements on tariffs translate into higher demand in the fourth fiscal quarter, the company would expect to be **higher in the guidance range**[12](index=12&type=chunk) - Despite challenges, the company expects to deliver earnings growth and strong operating cash flow in the fiscal year, focusing on cost reduction, network optimization, and disciplined commercial execution[12](index=12&type=chunk) [About Cabot Corporation](index=3&type=section&id=About%20Cabot%20Corporation) Cabot Corporation is a global specialty chemicals and performance materials company based in Boston, Massachusetts, specializing in reinforcing carbons, specialty carbons, battery materials, and other engineered materials - Cabot Corporation (NYSE: CBT) is a global specialty chemicals and performance materials company headquartered in Boston, Massachusetts[13](index=13&type=chunk) - The company is a leading provider of reinforcing carbons, specialty carbons, battery materials, engineered elastomer composites, inkjet colorants, masterbatches and conductive compounds, fumed metal oxides and aerogel[13](index=13&type=chunk) [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) This section outlines that the earnings release contains forward-looking statements regarding future expectations, performance, capital allocation, operating cash flow, and tax rates for fiscal year 2025. It cautions that these statements are not guarantees of future performance and are subject to various risks and uncertainties, including industry competition, regulatory changes, raw material volatility, customer relationships, and global economic conditions - All statements that address expectations or projections about the future, including expectations for performance, Adjusted EPS, capital allocation, operating cash flow, and operating tax rate for fiscal year 2025, are forward-looking statements[14](index=14&type=chunk) - These statements are not guarantees of future performance and are subject to risks, uncertainties, potentially inaccurate assumptions, and other factors, some of which are beyond the company's control and difficult to predict[14](index=14&type=chunk) - Important factors that could cause results to differ materially include industry capacity utilization and competition, safety/health/environmental requirements, climate change developments, volatility in energy/raw material prices, customer relationships, new product growth, acquisition benefits, project delays, economic conditions, litigation, interest/tax/currency rates, tariffs, and respirator claims[16](index=16&type=chunk) [Non-GAAP Financial Measures Explanation](index=4&type=section&id=Non-GAAP%20Financial%20Measures%20Explanation) This section provides detailed definitions and explanations for various non-GAAP financial measures, including Adjusted EPS, Total Segment EBIT, EBITDA, and Free Cash Flow, used by management to assess performance [Adjusted EPS](index=5&type=section&id=Adjusted%20EPS) Adjusted EPS excludes items management deems not representative of core business operations, such as unusual gains/losses, restructuring costs, legal/environmental matters, acquisition charges, asset impairments, business sale gains/losses, and employee benefit plan settlements. This measure aims to provide greater transparency and facilitate period-to-period performance comparisons - Adjusted EPS excludes items of expense and income that management does not consider representative of the Company's business operations to provide additional information related to the underlying performance of the business[20](index=20&type=chunk) - Excluded 'certain items' include Argentina controlled currency devaluation loss, global restructuring activities, legal and environmental matters, acquisition and integration-related charges, asset impairment charges, gains (losses) on sale of a business, and employee benefit plan settlements[22](index=22&type=chunk) - Management uses Adjusted EPS as a key measure in evaluating management performance for incentive compensation purposes[20](index=20&type=chunk) [Total Segment EBIT, Total Segment EBITDA, Adjusted EBITDA](index=6&type=section&id=Total%20Segment%20EBIT%2C%20Total%20Segment%20EBITDA%2C%20Adjusted%20EBITDA) Total Segment EBIT is the sum of EBIT from the two reportable segments, excluding certain items, interest expense, and unallocated corporate costs. Total Segment EBITDA further adjusts Total Segment EBIT for depreciation and amortization. Adjusted EBITDA reflects Total Segment EBITDA adjusted for unallocated corporate costs before corporate depreciation and amortization - Total Segment EBIT excludes certain items and items not controlled by business segments, such as interest expense and other unallocated corporate costs[25](index=25&type=chunk) - Total Segment EBITDA is equal to Total Segment EBIT, further adjusted for depreciation and amortization[26](index=26&type=chunk) - Adjusted EBITDA reflects Total Segment EBITDA and is further adjusted for unallocated corporate costs[26](index=26&type=chunk) [Free Cash Flow and Discretionary Free Cash Flow](index=6&type=section&id=Free%20Cash%20Flow%20and%20Discretionary%20Free%20Cash%20Flow) Free Cash Flow is calculated by deducting additions to property, plant, and equipment from cash flow provided by operating activities. Discretionary Free Cash Flow further deducts sustaining and compliance capital expenditures and changes in Net Working Capital from operating cash flow - Free Cash Flow is calculated by deducting Additions to property, plant and equipment from cash flow provided by (used in) operating activities[27](index=27&type=chunk) - Discretionary Free Cash Flow is calculated by deducting sustaining and compliance capital expenditures and changes in Net Working Capital from cash flow provided by (used in) operating activities[27](index=27&type=chunk) [Operating Tax Rate](index=6&type=section&id=Operating%20Tax%20Rate) The operating tax rate is based on management's forecast of the annual operating tax rate applied to adjusted pre-tax earnings, excluding income tax (expense) benefit on certain items, discrete tax items, and quarterly timing of losses in certain jurisdictions. This non-GAAP measure helps investors compare tax rates consistently year-over-year - The 'operating tax rate' is calculated based upon management's forecast of the annual operating tax rate for the fiscal year applied to adjusted pre-tax earnings[28](index=28&type=chunk) - It excludes income tax (expense) benefit on certain items, discrete tax items and, on a quarterly basis the timing of losses in certain jurisdictions[28](index=28&type=chunk) - Management believes this non-GAAP financial measure is useful supplemental information because it helps investors compare the tax rate year to year on a consistent basis and to understand what the tax rate on current operations would be without the impact of these items[28](index=28&type=chunk) [Explanation of Other Terms Used](index=7&type=section&id=Explanation%20of%20Other%20Terms%20Used) This section defines 'Product Mix' as the mix of product types, grades, or geographic regions sold and its impact on revenue or profitability, and 'Net Working Capital' as accounts receivable, inventory, accounts payable, and accrued expenses - The term 'product mix' refers to the mix of types and grade of products sold or the mix of geographic regions where products are sold, and the positive or negative impact this has on the revenue or profitability of the business or segment[31](index=31&type=chunk) - The term 'net working capital' includes accounts receivable, inventory and accounts payable and accrued expenses[31](index=31&type=chunk) [Consolidated Financial Statements (Unaudited)](index=8&type=section&id=Consolidated%20Financial%20Statements%20(Unaudited)) This section presents the unaudited consolidated statements of operations, financial position, and cash flows, providing a comprehensive overview of the company's financial performance and health [Consolidated Statements of Operations](index=8&type=section&id=Consolidated%20Statements%20of%20Operations) The consolidated statements of operations show a decrease in net sales and other operating revenues for Q3 FY25 to $923 million from $1,016 million in Q3 FY24. Net income attributable to Cabot Corporation decreased to $101 million from $109 million YoY | Metric | Q3 FY25 | Q3 FY24 | 9 Months FY25 | 9 Months FY24 | | :---------------------------------------------------- | :------ | :------ | :------------ | :------------ | | Net sales and other operating revenues (million USD) | $923 M | $1,016 M | $2,814 M | $2,993 M | | Cost of sales (million USD) | $679 M | $760 M | $2,094 M | $2,273 M | | Gross profit (million USD) | $244 M | $256 M | $720 M | $720 M | | Income (loss) from operations (million USD) | $167 M | $172 M | $484 M | $464 M | | Net income (loss) attributable to Cabot Corporation (million USD) | $101 M | $109 M | $288 M | $243 M | | Diluted earnings (loss) per common share (USD) | $1.86 | $1.94 | $5.22 | $4.30 | [Consolidated Statements of Financial Position](index=12&type=section&id=Consolidated%20Statements%20of%20Financial%20Position) As of June 30, 2025, total assets were $3,837 million, an increase from $3,736 million at September 30, 2024. Total liabilities were $1,954 million, and total stockholders' equity was $1,683 million | Metric | June 30, 2025 | Sept 30, 2024 | | :-------------------------------- | :------------ | :------------ | | Total current assets (million USD) | $1,573 M | $1,605 M | | Net property, plant and equipment (million USD) | $1,672 M | $1,534 M | | Total assets (million USD) | $3,837 M | $3,736 M | | Total current liabilities (million USD) | $740 M | $772 M | | Long-term debt (million USD) | $1,105 M | $1,087 M | | Total liabilities (million USD) | $1,954 M | $1,946 M | | Total stockholders' equity (million USD) | $1,683 M | $1,590 M | [Condensed Consolidated Statements of Cash Flows](index=17&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For Q3 FY25, cash provided by operating activities was $249 million, up from $207 million in Q3 FY24. Investing activities used $65 million, and financing activities used $183 million. The cash balance increased by $26 million during the quarter, ending at $239 million | Metric | Q3 FY25 | Q3 FY24 | 9 Months FY25 | 9 Months FY24 | | :------------------------------------------ | :------ | :------ | :------------ | :------------ | | Net income (loss) (million USD) | $113 M | $120 M | $322 M | $278 M | | Cash provided by (used in) operating activities (million USD) | $249 M | $207 M | $446 M | $488 M | | Cash provided by (used in) investing activities (million USD) | $(65) M | $(51) M | $(239) M | $(146) M | | Cash provided by (used in) financing activities (million USD) | $(183) M | $(131) M | $(190) M | $(326) M | | Increase (decrease) in cash and cash equivalents (million USD) | $26 M | $(9) M | $16 M | $(41) M | | Cash and cash equivalents at end of period (million USD) | $239 M | $197 M | $239 M | $197 M | [Segment Financial Data (Unaudited)](index=9&type=section&id=Segment%20Financial%20Data%20(Unaudited)) This section provides unaudited financial data broken down by segment, including summary results and detailed quarterly performance for Reinforcement Materials and Performance Chemicals [Summary Results by Segment](index=9&type=section&id=Summary%20Results%20by%20Segment) In Q3 FY25, Reinforcement Materials sales were $573 million (down from $649 million YoY), and Performance Chemicals sales were $320 million (down from $332 million YoY). Reinforcement Materials EBIT was $128 million (down from $136 million YoY), while Performance Chemicals EBIT was $57 million (up from $55 million YoY) | Metric | Q3 FY25 | Q3 FY24 | 9 Months FY25 | 9 Months FY24 | | :------------------------------------ | :------ | :------ | :------------ | :------------ | | **Sales** | | | | | | Reinforcement Materials (million USD) | $573 M | $649 M | $1,778 M | $1,966 M | | Performance Chemicals (million USD) | $320 M | $332 M | $942 M | $928 M | | **Segment Earnings Before Interest and Taxes (EBIT)** | | | | | | Reinforcement Materials (million USD) | $128 M | $136 M | $389 M | $414 M | | Performance Chemicals (million USD) | $57 M | $55 M | $152 M | $120 M | | Total Segment EBIT (million USD) | $185 M | $191 M | $541 M | $534 M | [Quarterly Results by Segment](index=14&type=section&id=Quarterly%20Results%20by%20Segment) This section provides a detailed quarterly breakdown of sales and EBIT for both Reinforcement Materials and Performance Chemicals segments for fiscal years 2024 and 2025, showing trends and specific quarterly performance | Metric (Sales) | Dec. Q FY24 | Mar. Q FY24 | June Q FY24 | Sept. Q FY24 | FY24 | Dec. Q FY25 | Mar. Q FY25 | June Q FY25 | Sept. Q FY25 | FY25 | | :--------------------- | :---------- | :---------- | :---------- | :----------- | :--- | :---------- | :---------- | :---------- | :----------- | :--- | | Reinforcement Materials (million USD) | $641 M | $676 M | $649 M | $644 M | $2,610 M | $611 M | $594 M | $573 M | $— | $1,778 M | | Performance Chemicals (million USD) | $285 M | $311 M | $332 M | $322 M | $1,250 M | $311 M | $311 M | $320 M | $— | $942 M | | Segment Sales (million USD) | $926 M | $987 M | $981 M | $966 M | $3,860 M | $922 M | $905 M | $893 M | $— | $2,720 M | | Metric (EBIT) | Dec. Q FY24 | Mar. Q FY24 | June Q FY24 | Sept. Q FY24 | FY24 | Dec. Q FY25 | Mar. Q FY25 | June Q FY25 | Sept. Q FY25 | FY25 | | :--------------------- | :---------- | :---------- | :---------- | :----------- | :--- | :---------- | :---------- | :---------- | :----------- | :--- | | Reinforcement Materials (million USD) | $129 M | $149 M | $136 M | $123 M | $537 M | $130 M | $131 M | $128 M | $— | $389 M | | Performance Chemicals (million USD) | $34 M | $31 M | $55 M | $44 M | $164 M | $45 M | $50 M | $57 M | $— | $152 M | | Total Segment EBIT (million USD) | $163 M | $180 M | $191 M | $167 M | $701 M | $175 M | $181 M | $185 M | $— | $541 M | [Non-GAAP Reconciliations (Unaudited)](index=19&type=section&id=Non-GAAP%20Reconciliations%20(Unaudited)) This section presents unaudited reconciliations of non-GAAP financial measures, including Adjusted EPS, operating tax rate, EBIT, EBITDA, and various cash flow metrics, to their most comparable GAAP equivalents [Certain Items and Reconciliation of Adjusted EPS and Operating Tax Rate](index=19&type=section&id=Certain%20Items%20and%20Reconciliation%20of%20Adjusted%20EPS%20and%20Operating%20Tax%20Rate) This section provides detailed tables reconciling GAAP EPS to Adjusted EPS and the effective tax rate to the operating tax rate, outlining the specific 'certain items' (e.g., global restructuring, legal matters, currency devaluation) that are excluded and their pre-tax and after-tax impact | Certain Items (Pre-tax) | Q3 FY25 | Q3 FY24 | 9 Months FY25 | 9 Months FY24 | | :------------------------------------------ | :------ | :------ | :------------ | :------------ | | Global restructuring activities (million USD) | $(3) M | $(1) M | $(6) M | $(13) M | | Legal and environmental matters and reserves (million USD) | — | — | $(6) M | $(1) M | | Argentina controlled currency devaluation and other losses (million USD) | — | $(2) M | — | $(43) M | | Other certain items (million USD) | — | $1 M | $(1) M | $1 M | | Total certain items, pre-tax (million USD) | $(3) M | $(2) M | $(13) M | $(56) M | | Total certain items after tax per share (USD per share) | $(0.04) | $0.02 | $(0.34) | $(0.95) | | Tax Rate Reconciliation | Q3 FY25 | Q3 FY24 | 9 Months FY25 | 9 Months FY24 | | :-------------------------------- | :------ | :------ | :------------ | :------------ | | Effective Tax Rate (%) | 28% | 25% | 29% | 31% | | Operating Tax Rate (%) | 28% | 27% | 28% | 28% | | Adjusted EPS Reconciliation | Q3 FY25 | Q3 FY24 | 9 Months FY25 | 9 Months FY24 | | :------------------------------------------ | :------ | :------ | :------------ | :------------ | | Net income (loss) per share attributable to Cabot Corporation (USD per share) | $1.86 | $1.94 | $5.22 | $4.30 | | Less: Certain items after tax per share (USD per share) | $(0.04) | $0.02 | $(0.34) | $(0.95) | | Adjusted earnings (loss) per share (USD per share) | $1.90 | $1.92 | $5.56 | $5.25 | [Reconciliation of Non-GAAP Financial Measures (EBIT, EBITDA, Cash Flow)](index=22&type=section&id=Reconciliation%20of%20Non-GAAP%20Financial%20Measures%20(EBIT%2C%20EBITDA%2C%20Cash%20Flow)) This section provides reconciliations for Total Segment EBIT, Total Segment EBITDA, Adjusted EBITDA, Free Cash Flow, and Discretionary Free Cash Flow to their most directly comparable GAAP measures, offering a comprehensive view of non-GAAP adjustments | Metric (EBIT/EBITDA Reconciliation) | Dec. Q FY25 | Mar. Q FY25 | June Q FY25 | FY25 (9 Months) | | :---------------------------------------------------- | :---------- | :---------- | :---------- | :-------------- | | Net income (loss) attributable to Cabot Corporation (million USD) | $93 M | $94 M | $101 M | $288 M | | Income (loss) from operations before income taxes and equity in earnings of affiliated companies (million USD) | $144 M | $151 M | $155 M | $450 M | | Total Segment EBIT (million USD) | $175 M | $181 M | $185 M | $541 M | | Total Segment EBITDA (million USD) | $212 M | $219 M | $224 M | $655 M | | Adjusted EBITDA (million USD) | $199 M | $206 M | $211 M | $616 M | | Metric (Segment EBITDA & Margin) | Dec. Q FY25 | Mar. Q FY25 | June Q FY25 | FY25 (9 Months) | | :-------------------------------- | :---------- | :---------- | :---------- | :-------------- | | Reinforcement Materials EBITDA (million USD) | $147 M | $148 M | $146 M | $441 M | | Reinforcement Materials EBITDA Margin (%) | 24% | 25% | 25% | 25% | | Performance Chemicals EBITDA (million USD) | $65 M | $71 M | $78 M | $214 M | | Performance Chemicals EBITDA Margin (%) | 21% | 23% | 24% | 23% | | Metric (Cash Flow Reconciliation) | Dec. Q FY25 | Mar. Q FY25 | June Q FY25 | FY25 (9 Months) | | :---------------------------------------------------- | :---------- | :---------- | :---------- | :-------------- | | Cash provided by (used in) operating activities (million USD) | $124 M | $73 M | $249 M | $446 M | | Free cash flow (million USD) | $47 M | $1 M | $188 M | $236 M | | Discretionary free cash flow (million USD) | $114 M | $110 M | $114 M | $338 M |

Core Insights - Cabot Corporation reported diluted earnings per share (EPS) of $1.86 and adjusted EPS of $1.90 for Q3 FY25, reflecting a slight decrease compared to the previous year [1][4][5] - The company experienced a decline in net sales to $923 million from $1,016 million year-over-year, with net income attributable to Cabot Corporation at $101 million, down from $109 million [3][4][5] - The company reaffirmed its adjusted EPS guidance for fiscal 2025 in the range of $7.15 to $7.50, indicating expectations of earnings growth despite a challenging macroeconomic environment [9] Financial Performance - For Q3 FY25, net sales were $923 million, a decrease of 9% from $1,016 million in Q3 FY24, while net income was $101 million compared to $109 million in the same quarter last year [3][4] - Adjusted EPS for Q3 FY25 was $1.90, down 1% from $1.92 in Q3 FY24, while diluted EPS decreased from $1.94 to $1.86 [4][5] - Operating cash flow was strong at $249 million, with $64 million returned to shareholders through dividends and share repurchases [3][7] Segment Results - The Reinforcement Materials segment reported EBIT of $128 million, down 6% year-over-year, while the Performance Chemicals segment saw a 4% increase in EBIT to $57 million [5][6] - Global volumes for Reinforcement Materials decreased by 8%, with significant declines in Asia Pacific (11%) and the Americas (9%), while Europe, the Middle East, and Africa saw a 4% increase [6][5] - Performance Chemicals experienced an 8% drop in volumes, attributed to lower customer demand due to tariff uncertainties and a weaker macroeconomic environment [6] Cash Flow and Balance Sheet - The company ended Q3 FY25 with a cash balance of $239 million and a net debt to EBITDA ratio of 1.3x, indicating strong balance sheet health [7] - Capital expenditures for the quarter were $61 million, reflecting ongoing investments in operational capabilities [7] Tax and Outlook - The effective tax rate for Q3 FY25 was 28%, with an expected operating tax rate for the fiscal year in the range of 27% to 29% [8] - The company anticipates lower volumes in the second half of FY25 due to ongoing tariff uncertainties but expects to remain within the middle to lower end of its adjusted EPS guidance range [9]

Core Viewpoint - Cabot Corporation has announced a definitive agreement to acquire Mexico Carbon Manufacturing S.A. de C.V. from Bridgestone Corporation for $70 million, enhancing its position in the global carbon black market and reinforcing its partnership with Bridgestone [1][3]. Group 1: Acquisition Details - The acquisition involves a facility that has been operational since 2005 and is located near Cabot's existing facility in Altamira, Mexico, which has been in operation since 1990 [1]. - The transaction is expected to close within three to six months, pending regulatory approval in Mexico [3]. - The acquisition is structured on a debt-free, cash-free basis, with customary closing adjustments [3]. Group 2: Strategic Implications - This acquisition will strengthen Cabot's long-term supply of reinforcing carbon products to Bridgestone and enhance its global capabilities [2]. - The facility will also have the capacity to manufacture a variety of reinforcing carbon products, providing flexibility for future growth opportunities [2]. - The deal aligns with Cabot's strategy to grow in core markets and emphasizes its commitment to operational excellence and customer value [3]. Group 3: Company Background - Cabot Corporation is a global specialty chemicals and performance materials company, recognized as a leading provider of reinforcing carbons and other specialty materials [4]. - Bridgestone Corporation is a global leader in tires and rubber, employing approximately 121,000 people and operating in over 150 countries [5].

Core Insights - Cabot Corporation has launched a new conductive additive, LITX 95F, specifically designed for lithium-ion batteries in energy storage systems (ESS) to enhance conductivity, extend cycle life, and improve processing performance [1][2] - The LITX 95F additive is particularly suitable for energy storage applications that require high durability and stability under frequent cycling conditions, making it applicable in residential and commercial storage scenarios [1] Company Summary - The LITX 95F conductive additive aims to improve the cycle life and energy density of batteries, demonstrating excellent capacity retention in performance tests based on thick electrode designs [1] - The high structural form of LITX 95F enhances the conductivity and stability of electrodes during repeated charge and discharge cycles, while also reducing material costs without compromising battery performance [1] Industry Summary - The global energy storage market has experienced significant growth in recent years, driven by the dual carbon goals and the need for a new power system centered around renewable energy [2] - The economic viability of commercial energy storage is becoming increasingly apparent, leading to rapid industry development as battery manufacturers seek to provide high-performance and cost-effective product solutions [2] - The introduction of Cabot's LITX 95F conductive additive is positioned to accelerate the adoption and application of energy storage systems by offering key performance and efficiency advantages [2]