Shares of Cabot Corp. CBT dropped by as much as 10% in the extended session Thursday after the specialty chemicals maker said its sales have slowed, as China’s recovery hasn’t materialized in the way that the company expected and global demand remains “soft,” and withdrew its outlook for the year. Sales in Cabot’s performance chemicals business for April and May were 13% lower than the same months of 2022, with declines across all product lines except battery materials, the company said. “We are not seeing the anticipated pace of recovery in China after a challenging March quarter in the performance chemicals segment,” Chief Executive Sean Keohane said in a statement. “In addition to the weakness in China, we continue to see soft demand on a global basis across many of our key end markets, including construction and consumer applications.” Cabot said it expects EBIT for the segment to be “only modestly higher” quarter-on-quarter. In Cabot’s reinforcement materials segment, volumes were down 8% for April and May as compared to last year’s April and May with declines across all regions and mostly in the replacement tire market, the company said. Cabot kept its expectations of “stronger” adjusted EPS in the second half of its fiscal year, but not by as much as it had guided. Cabot is “no longer expecting adjusted earnings per share for fiscal 2023 to be in the range of $6.10 to $6.50,” Keohane said. “We are focused on reducing costs in the near-term and we believe our investments have us well positioned for long-term growth.” Keohane said that the company will provide a more complete outlook update by early August, when it reports fiscal third-quarter earnings.
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