Cabot (CBT) Q4 2026 Earnings Report

The call was broadly positive, supported by solid fiscal 2026 earnings, strong cash generation, significant shareholder returns, a strong balance sheet, Performance Chemicals growth, battery materials progress, and targeted investments in long-term growth markets. However, management also highlighted meaningful challenges, including declining Reinforcement Materials earnings, weak and regionally mixed tire markets, unresolved customer negotiations, soft automotive and construction demand, near-term battery investment costs, and higher working capital and corporate costs.

For fiscal 2027, Cabot expects adjusted earnings per share to be in the range of $6.15-$6.75, an operating tax rate of 28%-30%, capital expenditures in a range of $200 million-$230 million, and favorable free cash flow; battery materials EBITDA is expected to be in the high $40 million range, compared with $43 million in fiscal 2026, with new capacity expected to begin contributing to earnings in fiscal 2028, while battery demand is currently projected to grow at a 15% CAGR through 2030. Reinforcement Materials first-quarter EBIT is expected to improve modestly from the fourth quarter but be lower year over year, and Performance Chemicals first-quarter EBIT is expected to be higher than the prior year period but below the strong level delivered in the fourth quarter, with sequential EBIT reduced by approximately $6 million-$8 million. Global tire production is expected to grow at 0.3% in calendar year 2026 and 0.9% in calendar year 2027, global light vehicle production is expected to decline 1.8% in calendar year 2026 and have modest global growth of a half a percent in calendar 2027, and growth in electronic applications is expected to be in the 6%-8% range over the coming years.