ERJ staff report (DS)
Boston, Massachusetts --Cabot Corp. reported net income of $29 million for the three months to December 2009, compared to $4 million a year ago, though sales were not significantly higher. When compared to the first quarter of fiscal 2009, results benefited from higher volumes, lower fixed costs from restructuring savings, replenishment of inventory levels due to higher volumes and a weaker dollar.
Sales revenues in the Rubber Blacks Business decreased slightly, in the three months, to $396 million, compared to $399 million a year ago, despite volumes increasing by 24 percent over the same period in 2008. Profit doubled to $42 million, from $24 million.
Additionally, said Cabot, unfavorable high cost inventory effects in the first quarter of fiscal 2009 did not reoccur in fiscal 2010. These factors were partially offset by an unfavorable contract lag and LIFO impact of $3 million compared to a $32 million benefit in the first quarter of 2009.
Volumes in China increased by 76% over the first quarter of fiscal 2009, while South America increased by 33%, Southeast Asia by 21%, North America by 17% and Europe, Middle East, Africa by 3%. Volumes increased by 2% globally when compared to the fourth quarter of fiscal 2009 as end markets continued to improve.
Commenting on the outlook for the Company, Patrick Prevost, Cabot's President and CEO, said, "Our key end markets are showing continued signs of recovery which bodes well for the future. Given that we are seeing demand stabilize around current levels, a full recovery to pre-downturn volumes may occur at a more moderate pace. Our restructuring work is yielding benefits, recently completed energy investments will begin to show results in 2010 and our emerging market investments will enable growth in the coming years. In summary, we have weathered the economic downturn with a strong balance sheet and are confident we will deliver on our long-term financial goals."
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Press release from Cabot