10-Q · May 6, 2026
Cabot Corporation delivered solid Q2 2026 results, with revenue of $904 million and EPS of $1.61, both exceeding expectations. The Performance Chemicals segment saw growth, partially offsetting declines in Reinforcement…
Earnings analysis · 10-Q
CBT earnings analysis
Filed August 4, 2026 · Our reading of the company's report
The latest report
Q3 revenue increased to $982 million, up $59 million year over year and $78 million sequentially, but profitability deteriorated materially: gross profit declined $60 million year over year and GAAP EPS fell to $0.12…
Read full summary
Q3 revenue increased to $982 million, up $59 million year over year and $78 million sequentially, but profitability deteriorated materially: gross profit declined $60 million year over year and GAAP EPS fell to $0.12 from $1.86. Reinforcement Materials’ $31 million EBIT decline, restructuring costs, and a $29 million U.K. pension settlement outweighed an $11 million EBIT improvement in Performance Chemicals. Cash generation remained positive at $126 million of calculated nine-month free cash flow, although operating cash flow fell to $278 million as working capital absorbed $58 million; management also expects sequential Q4 EBIT declines in both segments.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $0.12
What stood out
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Revenue returned to growth
Q3 revenue was $982 million, up $59 million year over year and $78 million sequentially from $904 million in Q2. Higher volumes contributed $51 million across the two segments year over year.
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Performance Chemicals expanded earnings
Performance Chemicals was the offset to weakness in Reinforcement Materials: Q3 sales rose $31 million and segment EBIT increased $11 million, supported by battery-materials and fumed-metal-oxides demand.
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Cash generation remained positive
Nine-month operating cash flow was $278 million, versus $446 million a year earlier. After $152 million of capital expenditures, calculated nine-month free cash flow was $126 million.
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Liquidity capacity remains substantial
Liquidity at June 30 included $250 million of cash and cash equivalents plus $1.1 billion of revolver availability. The new $1.3 billion unsecured revolver matures in May 2031.
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Capital returns continued
The company spent $101 million on share repurchases and $72 million on common dividends in the first nine months, while retaining authorization for 8,069,320 additional shares.
What to watch
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GAAP earnings dropped sharply
GAAP net income attributable to Cabot fell to $6 million ($0.12 per diluted share) from $101 million ($1.86) a year earlier. The filing attributes the decline in part to $39 million of higher restructuring expense, a $31 million Reinforcement Materials EBIT decline, and a $29 million U.K. pension-settlement charge.
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Reinforcement pricing and mix remain pressured
Reinforcement Materials faced $20 million of unfavorable Q3 pricing/product mix, and its EBIT declined $31 million year over year. Management expects segment EBIT to decline modestly sequentially in Q4 due to seasonal volume and regional-mix effects.
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Working capital is absorbing cash
Nine-month operating cash flow declined $168 million to $278 million as net working capital increased $58 million, largely from higher receivables and inventories. Liquidity also declined $126 million during the nine-month period.
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Sarnia environmental compliance deadline
The Sarnia, Ontario reinforcing-carbons plant is out of compliance with a sulfur-dioxide air standard and is currently required to install controls by July 1, 2028; an extension request remains under consideration. The supplied 10-Q does not present a formal Item 1A risk-factor amendment versus the 2025 10-K.
Management's outlook
The 10-Q does not provide a numeric revenue or EPS outlook. Management expects both Reinforcement Materials and Performance Chemicals segment EBIT to decline sequentially in Q4 fiscal 2026. Fiscal-2026 capital expenditures are expected to be $200 million to $215 million.
Earlier filings 4
10-K · November 24, 2025
Cabot reiterates its 'Creating for Tomorrow' growth strategy (introduced early fiscal 2022) while operating two reportable segments: Reinforcement Materials and Performance Chemicals. The company completed a capacity…
10-Q · May 7, 2025
Cabot reported quarterly net sales of $936 million (three months ended March 31, 2025) with gross profit of $241 million and diluted EPS of $1.69. Margins improved (gross ~25.8%, operating ~17.3%) and operating income…
10-K · November 20, 2024
Cabot (CBT) positions itself as a global specialty chemicals and performance materials company organized into two reportable segments (Reinforcement Materials and Performance Chemicals) with a continued growth strategy…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.