US Cabot Q3 net profit rises 35% year-on-year

23 July 2008 23:45  [Source: ICIS news]

HOUSTON (ICIS news)--US carbon black producer Cabot reported on Wednesday a third-quarter net profit of $27m (€17m), up 35% from $20m reported for the same time last year.

Net sales were $840m for the quarter, up from $649m. Cost of sales were $703m, up from $543m.

"Our ability to improve margins and profitability is particularly notable given the volatile feedstock environment," said CEO Patrick Prevost. "Our geographic breadth and strong positions in emerging markets allowed us to maintain solid volumes despite weakening market conditions in the US and western Europe."

The company's rubber blacks segment reported sales of $499m, up from $351m reported for the same time last year. The segment's profits were $37m, up from $11m.

Cabot attributed the segment's increase to strong unit margins, as price increases matched feedstock costs for most of the quarter.

Moreover, strong sales in Asia Pacific offset weaker demand in western Europe and continued softness in North America, Cabot said.

Overall, the company will continue to increase prices to offset feedstock costs, Cabot said. However, the recent increase in crude prices in June and July will affect the company throughout the current quarter.

Over the next 18-24 months, Cabot plans to eliminate most of the time lag in its rubber blacks supply contracts, the company said. It will also implement monthly pricing adjustments wherever feasible.

Shares of Cabot closed at $25.39 on the New York Stock Exchange, up 2.59%.

($1 = €0.63)

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By: Al Greenwood
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