Cabot Announces Second Quarter Operating Results EPS $0.54 Versus $0.33
Cabot Announces Second Quarter Operating Results EPS $0.54 Versus $0.33
April 27, 2004
BOSTON, MA (April 27, 2004) - Cabot Corporation (CBT/NYSE) today announced earnings of $37 million ($0.54 per diluted common share) for the second quarter ended March 31, 2004, compared with $23 million ($0.33 per diluted common share) for the year ago quarter. These results contain $1 million of after tax charges ($0.02 per diluted common share) from certain items and discontinued operations recorded in the second quarter ended March 31, 2004, compared with $15 million of after tax charges ($0.21 per diluted common share) for the year ago quarter. Details concerning charges from certain items and discontinued operations, which are not included in the business segment results discussed later in this release, are included in Exhibit I to this press release.
Kennett F. Burnes, Cabot's Chairman and CEO, said, "I am very pleased with the financial results for the quarter, which reflect strengthening demand across the businesses and an increased contribution from the "excellence" initiatives which we began implementing last year to improve our overall operating performance. The results for the quarter also reflect encouraging progress in our inkjet colorants and cesium formate businesses."
Chemical Business - For the quarter ended March 31, 2004, the Chemical Business segment reported an 87% increase in year over year segment profit, from $23 million in the second quarter of fiscal year 2003 to $43 million in the second quarter of fiscal year 2004. Within the Chemical Business segment, carbon black's profit was $13 million higher than the same quarter last year. This improvement resulted from stronger volumes, lower controllable costs, and positive currency translation of foreign earnings, which more than offset the variable margin decline due to lower prices and higher feedstock costs. The sequential quarter profit improvement of $12 million was due to stronger demand, lower feedstock costs, and positive currency translation. These favorable items more than offset a decrease in prices and higher administrative costs.
In the second quarter, profits in Cabot's fumed metal oxides business were $7 million higher than the same quarter last year and $3 million higher than the first quarter of fiscal 2004. When compared to the second quarter of fiscal 2003, improved volumes and lower raw material and administrative costs were partially offset by price erosion in niche products. Sequentially, profits improved primarily due to higher volumes.
During the second quarter, the inkjet colorants business continued to deliver strong growth in the OEM and after-market segments. The business also began shipping commercial product to a second OEM for use in a printer anticipated to be launched later this calendar year. Sales volumes for this business were 61% higher in the second quarter of fiscal 2004 than in the same quarter last year and 34% higher sequentially. Inkjet profits doubled compared to each of the same quarter last year and the first quarter of fiscal 2004, as volume improvement more than offset increased costs to support both higher sales activity and the business's development programs.
Supermetals Business - In the second quarter of fiscal 2004, the Cabot Supermetals Business earned $16 million of segment profit, which was $20 million less than the same period last year, due primarily to lower intermediate product sales following the expiration of certain contracted sales at the end of the last fiscal year. This decline was partially offset by lower operating costs and stronger market demand. Sequentially, segment profit was $5 million less than the first quarter of 2004 primarily due to the timing of shipments to contract customers.
Specialty Fluids Business - In the second quarter of fiscal 2004, Cabot Specialty Fluids successfully completed its first job under its agreement with Statoil. Primarily as a result of higher volumes associated with the completion of this job, the business reported a $3 million profit in the quarter, representing a $4 million increase from the second quarter of 2003 and a $5 million increase compared to the first quarter of fiscal 2004.
With respect to the future, Burnes said, "We are encouraged by the strengthening global economy, which, when combined with the progress of our "excellence" initiatives and recent developments in the cesium formate and inkjet colorants businesses, should provide us with opportunities to build upon our current strong performance despite continued high raw material costs."
For those interested in more detailed information on Cabot's Second Quarter 2004 results, please see the Supplemental Business Information available today on the Company's website in the Investor Relations section: http://cabot-corp.com.
Cabot Corporation is a global specialty chemicals and materials company headquartered in Boston, MA. Cabot's major products are carbon black, fumed silica, inkjet colorants, capacitor materials, and cesium formate drilling fluids.
Forward-Looking Information: Included above are forward-looking statements relating to management's expectations regarding future profits, new business growth, the Company's product development program and the possible achievement of the Company's financial goals. Actual results may differ materially from the results anticipated in the forward-looking statements included in this press release due to a variety of factors, including domestic and global economic conditions, such as market supply and demand, prices and costs and availability of raw materials; fluctuations in currency exchange rates; patent rights of others; stock market conditions; the timely commercialization of products under development by the Company (which may be disrupted or delayed by technical difficulties, market acceptance, competitors' new products, as well as difficulties in moving from the experimental stage to the production stage); the Company's ability to successfully manage acquisitions; demand for our customers' products; competitors' reactions to market conditions; the accuracy of the assumptions used by the Company in establishing a reserve for its share of liability for respirator claims; and the outcome of pending litigation and governmental investigations. Other factors and risks are discussed in the Company's 2003 Annual Report on Form 10-K.
Kennett F. Burnes, Cabot's Chairman and CEO, said, "I am very pleased with the financial results for the quarter, which reflect strengthening demand across the businesses and an increased contribution from the "excellence" initiatives which we began implementing last year to improve our overall operating performance. The results for the quarter also reflect encouraging progress in our inkjet colorants and cesium formate businesses."
Chemical Business - For the quarter ended March 31, 2004, the Chemical Business segment reported an 87% increase in year over year segment profit, from $23 million in the second quarter of fiscal year 2003 to $43 million in the second quarter of fiscal year 2004. Within the Chemical Business segment, carbon black's profit was $13 million higher than the same quarter last year. This improvement resulted from stronger volumes, lower controllable costs, and positive currency translation of foreign earnings, which more than offset the variable margin decline due to lower prices and higher feedstock costs. The sequential quarter profit improvement of $12 million was due to stronger demand, lower feedstock costs, and positive currency translation. These favorable items more than offset a decrease in prices and higher administrative costs.
In the second quarter, profits in Cabot's fumed metal oxides business were $7 million higher than the same quarter last year and $3 million higher than the first quarter of fiscal 2004. When compared to the second quarter of fiscal 2003, improved volumes and lower raw material and administrative costs were partially offset by price erosion in niche products. Sequentially, profits improved primarily due to higher volumes.
During the second quarter, the inkjet colorants business continued to deliver strong growth in the OEM and after-market segments. The business also began shipping commercial product to a second OEM for use in a printer anticipated to be launched later this calendar year. Sales volumes for this business were 61% higher in the second quarter of fiscal 2004 than in the same quarter last year and 34% higher sequentially. Inkjet profits doubled compared to each of the same quarter last year and the first quarter of fiscal 2004, as volume improvement more than offset increased costs to support both higher sales activity and the business's development programs.
Supermetals Business - In the second quarter of fiscal 2004, the Cabot Supermetals Business earned $16 million of segment profit, which was $20 million less than the same period last year, due primarily to lower intermediate product sales following the expiration of certain contracted sales at the end of the last fiscal year. This decline was partially offset by lower operating costs and stronger market demand. Sequentially, segment profit was $5 million less than the first quarter of 2004 primarily due to the timing of shipments to contract customers.
Specialty Fluids Business - In the second quarter of fiscal 2004, Cabot Specialty Fluids successfully completed its first job under its agreement with Statoil. Primarily as a result of higher volumes associated with the completion of this job, the business reported a $3 million profit in the quarter, representing a $4 million increase from the second quarter of 2003 and a $5 million increase compared to the first quarter of fiscal 2004.
With respect to the future, Burnes said, "We are encouraged by the strengthening global economy, which, when combined with the progress of our "excellence" initiatives and recent developments in the cesium formate and inkjet colorants businesses, should provide us with opportunities to build upon our current strong performance despite continued high raw material costs."
For those interested in more detailed information on Cabot's Second Quarter 2004 results, please see the Supplemental Business Information available today on the Company's website in the Investor Relations section: http://cabot-corp.com.
Cabot Corporation is a global specialty chemicals and materials company headquartered in Boston, MA. Cabot's major products are carbon black, fumed silica, inkjet colorants, capacitor materials, and cesium formate drilling fluids.
Forward-Looking Information: Included above are forward-looking statements relating to management's expectations regarding future profits, new business growth, the Company's product development program and the possible achievement of the Company's financial goals. Actual results may differ materially from the results anticipated in the forward-looking statements included in this press release due to a variety of factors, including domestic and global economic conditions, such as market supply and demand, prices and costs and availability of raw materials; fluctuations in currency exchange rates; patent rights of others; stock market conditions; the timely commercialization of products under development by the Company (which may be disrupted or delayed by technical difficulties, market acceptance, competitors' new products, as well as difficulties in moving from the experimental stage to the production stage); the Company's ability to successfully manage acquisitions; demand for our customers' products; competitors' reactions to market conditions; the accuracy of the assumptions used by the Company in establishing a reserve for its share of liability for respirator claims; and the outcome of pending litigation and governmental investigations. Other factors and risks are discussed in the Company's 2003 Annual Report on Form 10-K.
To access a copy of the Supplemental Business Information for this quarter please Click here.