Fourth Quarter and Fiscal Year 2026
Filed Nov 2, 2026Cabot Corporation reports fourth quarter Diluted EPS of $1.25 and Adjusted EPS of $1.61; fiscal year Diluted EPS of $4.02 and Adjusted EPS of $6.42.
Fourth-quarter sales rose to $1,009 million from $899 million and Performance Chemicals EBIT increased to $60 million from $42 million, but Reinforcement Materials EBIT fell to $87 million from $119 million, GAAP and adjusted EPS trailed the prior-year quarter, and fiscal-year adjusted EPS declined to $6.42 from $7.25.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Fourth quarter fiscal 2026 net sales and other operating revenuesGAAP | $1.01B | – | – |
| Fiscal year 2026 net sales and other operating revenuesGAAP | $3.74B | – | – |
| Fourth quarter fiscal 2026 cost of salesGAAP | $805M | – | – |
| Fiscal year 2026 cost of salesGAAP | $2.94B | – | – |
| Fourth quarter fiscal 2026 gross profitGAAP | $204M | – | – |
| Fiscal year 2026 gross profitGAAP | $809M | – | – |
| Fourth quarter fiscal 2026 selling and administrative expensesGAAP | $69M | – | – |
| Fiscal year 2026 selling and administrative expensesGAAP | $278M | – | – |
| Fourth quarter fiscal 2026 research and technical expensesGAAP | $14M | – | – |
| Fiscal year 2026 research and technical expensesGAAP | $54M | – | – |
| Fourth quarter fiscal 2026 income from operationsGAAP | $121M | – | – |
| Fiscal year 2026 income from operationsGAAP | $477M | – | – |
| Fourth quarter fiscal 2026 income from operations before income taxes and equity in earnings of affiliated companiesGAAP | $110M | – | – |
| Fiscal year 2026 income from operations before income taxes and equity in earnings of affiliated companiesGAAP | $406M | – | – |
| Fourth quarter fiscal 2026 provision for income taxesGAAP | −$38M | – | – |
| Fiscal year 2026 provision for income taxesGAAP | −$165M | – | – |
| Fourth quarter fiscal 2026 effective tax rateGAAP | 34% | – | – |
| Fiscal year 2026 effective tax rateGAAP | 41% | – | – |
| Fourth quarter fiscal 2026 operating tax ratenon-GAAP | 28% | – | – |
| Fiscal year 2026 operating tax ratenon-GAAP | 29% | – | – |
| Fourth quarter fiscal 2026 net incomeGAAP | $73M | – | – |
| Fiscal year 2026 net incomeGAAP | $247M | – | – |
| Fourth quarter fiscal 2026 net income attributable to Cabot CorporationGAAP | $66M | – | – |
| Fiscal year 2026 net income attributable to Cabot CorporationGAAP | $213M | – | – |
| Fourth quarter fiscal 2026 diluted earnings per common share attributable to Cabot CorporationGAAP | $1.25 | – | – |
| Fiscal year 2026 diluted earnings per common share attributable to Cabot CorporationGAAP | $4.02 | – | – |
| Fourth quarter fiscal 2026 basic earnings per common share attributable to Cabot CorporationGAAP | $1.26 | – | – |
| Fiscal year 2026 basic earnings per common share attributable to Cabot CorporationGAAP | $4.04 | – | – |
| Fourth quarter fiscal 2026 Adjusted EPSnon-GAAP | $1.61 | – | – |
| Fiscal year 2026 Adjusted EPSnon-GAAP | $6.42 | – | – |
| Fourth quarter fiscal 2026 certain items after tax per sharenon-GAAP | $(0.36) | – | – |
| Fiscal year 2026 certain items after tax per sharenon-GAAP | $(2.40) | – | – |
| Fiscal year 2026 Adjusted EBITDAnon-GAAP | $735M | – | – |
| Fourth quarter fiscal 2026 Adjusted EBITDAnon-GAAP | $181M | – | – |
| Fourth quarter fiscal 2026 cash provided by operating activitiesGAAP | $143M | – | – |
| Fiscal year 2026 cash provided by operating activitiesGAAP | $421M | – | – |
| Fourth quarter fiscal 2026 additions to property, plant and equipmentGAAP | −$55M | – | – |
| Fiscal year 2026 additions to property, plant and equipmentGAAP | −$207M | – | – |
| Fourth quarter fiscal 2026 free cash flownon-GAAP | $88M | – | – |
| Fiscal year 2026 free cash flownon-GAAP | $214M | – | – |
| Fourth quarter fiscal 2026 discretionary free cash flownon-GAAP | $117M | – | – |
| Fiscal year 2026 discretionary free cash flownon-GAAP | $342M | – | – |
| Fiscal year 2026 Battery Materials EBITDAother | $43M | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Reinforcement Materials, fourth quarter fiscal 2026EBIT was $87 million versus $119 million in the fourth quarter of fiscal 2025. The decline was primarily driven by lower gross profit per ton, partially offset by higher volumes. Volumes increased by 5%, driven by Asia Pacific and the Americas, including higher volumes from the Indonesia capacity addition and the acquisition in Mexico. | $634M | – | – |
| Performance Chemicals, fourth quarter fiscal 2026EBIT was $60 million versus $42 million in the fourth quarter of fiscal 2025, primarily due to higher gross profit per ton and increased volumes. Higher gross profit per ton was driven by favorable product mix and lower costs; volumes increased in battery materials and specialty carbons. | $340M | – | – |
| Reinforcement Materials, fiscal year 2026Segment EBIT was $379 million versus $508 million in fiscal year 2025. | $2.30B | – | – |
| Performance Chemicals, fiscal year 2026Segment EBIT was $235 million versus $194 million in fiscal year 2025. | $1.32B | – | – |
Fiscal year 2027 outlook
- Tax rate28% to 30%
- NoteAdjusted EPS of $6.15 to $6.75
- NoteThe Company expects to maintain solid margins as it manages volatile energy input costs and competitive pressures.
- NoteThe Company anticipates continuing to generate strong operating cash flow.
Capital returns
- $25 million for the payment of dividends during the fourth quarter of fiscal 2026.
- $45 million in share repurchases during the fourth quarter of fiscal 2026.
- $97 million in cash dividends paid to common stockholders during fiscal year 2026.
- $146 million in share repurchases during fiscal year 2026.
What drove it
- Reinforcement Materials global volumes increased by 5% year over year in the fourth quarter, with Asia Pacific up 10%, Europe, Middle East, Africa down (7%), and the Americas up 3%.
- Reinforcement Materials gross profit per ton declined due primarily to calendar year 2026 customer agreements and less favorable regional product mix.
- Performance Chemicals benefited from favorable product mix, lower costs, and increased battery materials and specialty carbons volumes.
- Battery Materials delivered $43 million of EBITDA for fiscal 2026, described as a new high for the product line.
- Cabot signed an agreement with the U.S. Department of Energy for a $50 million grant supporting expansion of domestic advanced conductive additives production at facilities in Louisiana and Texas.
- Fourth-quarter net working capital used $10 million of cash due to higher raw material costs.
Concerns
- Fourth-quarter Reinforcement Materials EBIT decreased by $32 million year over year to $87 million.
- Fourth-quarter Adjusted EPS of $1.61 was below $1.70 in the prior-year quarter, while fiscal-year Adjusted EPS of $6.42 was below $7.25.
- Fiscal-year cash provided by operating activities declined to $421 million from $665 million.
- Fiscal-year gross profit declined to $809 million from $940 million despite net sales and other operating revenues increasing to $3,744 million from $3,713 million.
- Fiscal-year certain items before tax were $(109) million, including $(72) million of global restructuring activities and $(30) million of employee benefit plan settlement and other charges.
- Management cited volatile energy input costs, competitive pressures, and a dynamic macroeconomic environment.
What to watch
- Delivery against fiscal year 2027 Adjusted EPS guidance of $6.15 to $6.75.
- The expected fiscal year 2027 operating tax rate range of 28% to 30%.
- Reinforcement Materials gross profit per ton, regional product mix, and the trajectory of volumes following the 5% fourth-quarter increase.
- Performance Chemicals margins, battery materials volumes, specialty carbons volumes, and the development of the Battery Materials platform.
- Execution of restructuring actions, optimization activities, and yield technology investments.
- Use of the $50 million U.S. Department of Energy grant to expand domestic production of advanced conductive additives for batteries.
Balance sheet and cash flow
- Cash and cash equivalents were $254 million as of September 30, 2026, compared with $258 million as of September 30, 2025.
- Cash, cash equivalents and restricted cash were $255 million as of September 30, 2026; restricted cash was $1 million.
- Available liquidity was $1.5 billion at the end of the fourth quarter.
- Net debt to EBITDA ratio was 1.4 times as of September 30, 2026.
- Short-term borrowings were $65 million and long-term debt was $1,180 million as of September 30, 2026.
- Fiscal year 2026 cash provided by operating activities was $421 million, compared with $665 million in fiscal year 2025.
- Fiscal year 2026 additions to property, plant and equipment were $(207) million, compared with $(274) million in fiscal year 2025.
- Fiscal year 2026 acquisition of business, net of cash acquired, was $(66) million.
Analysis
Cabot closed fiscal 2026 with fourth-quarter net sales and other operating revenues of $1,009 million, versus $899 million in the prior-year quarter, and fiscal-year revenue of $3,744 million, versus $3,713 million. Despite the fourth-quarter sales increase, gross profit was $204 million versus $220 million, and fiscal-year gross profit was $809 million versus $940 million. Fourth-quarter income from operations was $121 million versus $137 million, while fiscal-year income from operations was $477 million versus $621 million.
Reported earnings improved year over year in the fourth quarter, with net income attributable to Cabot Corporation of $66 million and diluted EPS of $1.25, compared with $43 million and $0.79. However, fourth-quarter Adjusted EPS was $1.61, below $1.70. Fiscal-year net income attributable to Cabot Corporation was $213 million and diluted EPS was $4.02, compared with $331 million and $6.02, while Adjusted EPS was $6.42 compared with $7.25. Fiscal-year results included $(109) million of certain items before tax, including $(72) million of global restructuring activities and $(30) million of employee benefit plan settlement and other charges.
Segment performance diverged. Reinforcement Materials generated fourth-quarter sales of $634 million and EBIT of $87 million, compared with $563 million and $119 million. Global volumes increased 5%, but lower gross profit per ton from calendar year 2026 customer agreements and less favorable regional product mix reduced EBIT. Performance Chemicals delivered fourth-quarter sales of $340 million and EBIT of $60 million, versus $308 million and $42 million, supported by favorable product mix, lower costs, and increased battery materials and specialty carbons volumes. Battery Materials generated $43 million of EBITDA in fiscal 2026.
Cash generation remained meaningful but was lower than the prior year. Cash provided by operating activities was $143 million in the fourth quarter and $421 million for fiscal 2026, compared with $219 million and $665 million. Fiscal-year capital expenditures were $(207) million, producing free cash flow of $214 million and discretionary free cash flow of $342 million. Cabot paid $97 million of dividends and repurchased $146 million of shares during the fiscal year. It ended September 30, 2026 with $254 million of cash and cash equivalents, $1.5 billion of available liquidity, and a net debt to EBITDA ratio of 1.4 times.
For fiscal 2027, Cabot guided to Adjusted EPS of $6.15 to $6.75 and an operating tax rate of 28% to 30%. Management expects volume growth in battery materials, electronics, and strategic customer accounts, alongside solid margins despite volatile energy input costs and competitive pressure. Priorities include completing restructuring actions, optimization activities, yield technology investment, and advancing the Battery Materials platform, including the expansion supported by the $50 million U.S. Department of Energy grant.
Management, verbatim
I am pleased by the strong execution of our teams during a fiscal year that was shaped by a difficult macroeconomic backdrop in many of our key end markets. We finished the year with a strong fourth quarter, delivering Adjusted EPS of $1.61, driven by robust performance in our Performance Chemicals segment. The segment delivered EBIT of $60 million in the quarter and $235 million for the fiscal year. Reinforcement Materials delivered segment EBIT of $87 million in the quarter and $379 million for the full year.
Erica McLaughlin, Cabot President and Chief Executive Officer
We also achieved an important milestone in our Battery Materials product line, delivering $43 million of EBITDA for fiscal 2026, a new high for the product line. Building on this momentum, we signed an agreement with the U.S. Department of Energy for a $50 million grant to support our expansion of domestic production of advanced conductive additives for batteries at our facilities in Louisiana and Texas. We expect these investments to strengthen our Battery Materials platform in North America and expand our capabilities to support growing demand for battery energy storage systems, electric vehicles, and other specialty battery applications.
Erica McLaughlin, Cabot President and Chief Executive Officer
Looking ahead to fiscal 2027, we expect Adjusted EPS to be in the range of $6.15 to $6.75. We anticipate continuing to increase volumes within our key growth markets, such as battery materials and electronics, as well as with strategic customer accounts. We expect to maintain solid margins as we manage volatile energy input costs and competitive pressures. We remain focused on completing our previously announced restructuring actions, implementing optimization activities and investing in yield technology to improve the competitiveness of our network.
Erica McLaughlin, Cabot President and Chief Executive Officer
Not in the filing
stated, not guessed- Prior-period outlook was not provided; therefore, no comparison of actual results with prior guidance is available.
- Fiscal year 2027 revenue guidance was not provided.
- Fiscal year 2027 gross margin guidance was not provided.
- Fiscal year 2027 operating expense guidance was not provided.
- A reported gross margin percentage for the fourth quarter or fiscal year was not provided.
- Prior-year Adjusted EBITDA, free cash flow, and discretionary free cash flow were not provided.
- A fourth-quarter or fiscal-year net debt amount was not provided.
- Percentage changes for total revenue, gross profit, operating income, net income, EPS, segment sales, and segment EBIT were not printed on their respective rows.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.