US Cabot Q2 net income plunges on fewer one-time gains

30 April 2013 22:25  [Source: ICIS news]

HOUSTON (ICIS)--US-based carbon black producer Cabot reported on Tuesday a fiscal second-quarter net income of $27m (€21m), down from $240m from the same time last year because the company had fewer one-time gains.

Cabot reported a $189m gain from discontinued operations in the second quarter of 2012. This year, Cabot reported no such gains.

Income also fell because of higher costs and slightly lower sales.

Cabot reported Q2 sales of $842m, down from $844m from the same time last year. Cost of sales were $698m, up 4% from $671m reported from the same time last year.

Gross profit was $144m, down 17% year on year.

The quarter suffered from the results of a Japanese plant disruption in the company's reinforced materials division, Cabot said. The disruption lowered sales volumes and had an $8m pre-tax effect on the company.

Nonetheless, demand improved quarter on quarter for many of the company's businesses, Cabot said.

Looking ahead, demand should recover moderately during the year, according to a statement by Patrick Prevost, Cabot CEO.

"We have seen some positive signs in a number of our markets around the globe, with the exception of Europe," he said. "We remain well positioned to capture volume growth as global demand returns to more normal levels.”

Ongoing weakness in Europe and slower growth in emerging markets have caused Cabot to add an extra year to its initial plan to reach $5.00 in earnings/share by fiscal 2014, Prevost said.

The company now expects to reach that goal in fiscal 2015, he said.

"We continue to implement our strategic plan and remain focused on our value pricing strategy, investments in operational excellence and technology, completing our capacity expansion in China and the introduction of new products,” he added.

($1 = €0.76)

By: Al Greenwood
+1 713 525 2645

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