Cabot Corp (NYSE: CBT) stock fell over 0.8% in the pre-market session of 24th November, 2020 (Source: Google finance) after the company posted mixed results for the fourth quarter of FY 20 and gave strong earnings outlook for the current quarter.
For the fourth quarter of fiscal 2020, the company has reported the net loss attributable to Cabot Corporation of $272 million ($4.81 loss per diluted common share). The net loss has also included a total after-tax per share charges from certain items of $5.49 mainly from the loss on the sale and asset impairment related to the Purification Solutions agreements with ADES and tax certain items mainly related with an increase in the valuation allowance associated with U.S. deferred tax assets. The company had generated $99 million of operating cash flow in the quarter.
The strong cash flow helped the company to reduce the debt, continue to pay our dividend and fund $38 million of capital expenditures in the fourth quarter. The balance sheet remained strong with approximately $1.4 billion of liquidity and a total debt to EBITDA ratio of 2.9x as of September 30, 2020. The aggressive cost reduction efforts helped in generating a savings of $68 million in fiscal 2020.
Moreover, the company for fourth quarter fiscal 2020 has delivered EBIT in Reinforcement Materials decline by $12 million compared to the fourth quarter of fiscal 2019. Globally, the volumes had fallen 11% year-over-year as the COVID-19 pandemic impacted demand levels. The fourth quarter fiscal 2020 EBIT in Performance Chemicals had fallen by $16 million compared to the fourth quarter of fiscal 2019 mainly due to a less favorable product mix in the specialty carbons and fumed metal oxides product lines, and by a more competitive pricing environment in the fumed metal oxides product line. Fourth quarter fiscal 2020 EBIT in Purification Solutions had fallen by $3 million compared to the fourth quarter of fiscal 2019 primarily due to the impact from reducing inventory levels to drive strong cash flow.
CBT in the fourth quarter of FY 20 has reported the adjusted earnings per share of 83 cents, beating the analysts’ estimates for the adjusted earnings per share of 55 cents. The company had reported the adjusted revenue of $659 million in the fourth quarter of FY 20, missing the analysts’ estimates for revenue of $675 million.
The company expects adjusted earnings per share in the first fiscal quarter to be in the range of $0.80 and $0.90, versus the consensus of $0.54.