US Cabot Q1 net income soars on higher revenue, business sale

01 May 2012 23:36  [Source: ICIS news]

HOUSTON (ICIS)--US-based carbon-black producer Cabot reported on Tuesday a first-quarter net income of $240m (€182m), up from $51m for the same time last year because of higher revenue and the sale of its supermetals business.

The $400m supermetals sale allowed Cabot to report $189m in income from discontinued operations.

However, Cabot also benefitted from higher revenue, which grew faster than cost of sales.

First-quarter net sales reached $844m, up 14% from $739m reported for the same time last year. Cost of sales were $671m, up 11% from $605m reported for the same time last year.

As a result, first-quarter gross profit reached $173m, up 29% from $134m reported for the same time last year.

Cabot attributed the increase to the pre-tax earnings from the company's rubber-blacks business and specialty-fluids segment. These two segments reported records in quarterly earnings.

Looking forward, Cabot chief executive Patrick Prevost said the company was optimistic about improving conditions in North America and China. At the same time, growth is continuing in emerging economies in Asia and South America.

"The growth in emerging markets is seen not only in the tyre and automotive industries, but across a variety of the industries we serve," Prevost said in a statement.

“We are delivering earnings growth through margin and capacity expansion as well as new business and product development," Prevost said. "Our increased margins were achieved through continual efficiency improvement efforts and the execution of our global pricing strategy."

However, the outlook for Europe remains challenging, he said.

($1 = €0.76)

By: Al Greenwood
+1 713 525 2645

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