Cabot posts sales, earnings declines in reinforcement materials segment

Boston, Massachusetts – Cabot Corp.’s reinforcement materials segment has reported an 11% year-on-year decline in second quarter earnings (EBITDA) to $148 million (€131 million) on 12% lower sales of $594 million.

The unit, which mainly supplies rubber carbon black materials, linked the declines to weak demand in South America and Asia during the three months ended 31 March, Cabot said 5 May.

This included a 7% decline in volumes, driven mainly by lower tire demand and contract outcomes in South America, which accounts for 40% of total shipments in the Americas region.

In the Americas, volumes were down 9% year-on-year, as Chinese tire imports impacted demand from local manufacturers.

In Asia, volumes fell 8% due to the lunar new year holidays as well as international trade uncertainties.

Demand in Europe was down 1%, due to “cautious customer behaviour amid trade uncertainties,” Cabot's report continued.

In view of the uncertain impact of "recent tariff policies on customer demand in the second half, the group revised its adjusted EPS guidance for fiscal 2025 to be in the range of $7.15 to $7.50.

"While the direct impact from tariffs is expected to be limited, this outlook reflects our expectations for lower demand as customers adopt a more cautious posture around inventory levels," said Sean Keohane, Cabot president and CEO.

The forecast, he added, "also assumes an expectation that we will maintain margins similar to our second fiscal quarter. We are confident in our ability to successfully adapt and execute in this dynamic environment.”