Cabot Corporation CBT is set to release third-quarter fiscal 2022 results on Aug 8, after the closing bell.

The company beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters. In this timeframe, it delivered an earnings surprise of 16.2%, on average. It posted an earnings surprise of 20.7% in the last reported quarter. The company is likely to have benefited from strong demand and higher prices across its segments in the fiscal third quarter.
 
Shares of Cabot have gained 38.5% in the past year compared with 9.4% decline of the industry.

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Let’s see how things are shaping up for this announcement.

What Do the Estimates Indicate?

The Zacks Consensus Estimate for Cabot’s third-quarter consolidated sales is currently pegged at $1,043.1 million, which calls for an increase of 13.8% from the year-ago quarter’s tally. Our estimate for the quarter is $1,043.5 million.

The Zacks Consensus Estimate for the Reinforcement Materials segment’s revenues is currently pegged at $627 million, flat on a sequential comparison basis. Our estimate for the quarter is $628.8 million.

The consensus mark for the Performance Chemicals segment’s revenues is pegged at $345 million, which suggests a 4.2% sequential decline. Our estimate for the quarter is $326.4 million.

Some Factors at Play

Cabot is expected to have gained from a recovery in demand from the pandemic-led slowdown, its disciplined execution of operations and targeted growth initiatives. The company is likely to have benefited from strong underlying demand across its businesses in the quarter to be reported.

Higher volumes and favorable pricing are expected to have driven results in its Reinforcement Materials segment. Its Performance Chemicals unit is also likely to have gained from price increases. Volumes are also likely to have been driven by growth in Battery Materials applications in the fiscal third quarter.

 

Zacks Model

Our proven model does not conclusively predict an earnings beat for Cabot this season. The combination of a positive Earnings ESP  and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.

Earnings ESP: Earnings ESP for Cabot is 0.00%. The Zacks Consensus Estimate for earnings for the fiscal third quarter is currently pegged at $1.53. Our estimate for the quarter is $1.53. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Cabot currently carries a Zacks Rank #1.

Stocks That Warrant a Look

Here are some companies in the basic materials space you may want to consider, as our model shows these have the right combination of elements to post an earnings beat this quarter:

Maverix Metals Inc. MMX, expected to release earnings on Aug 11, has an Earnings ESP of +9.09% and sports a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Maverix Metals’ second-quarter earnings has been revised 33.3% upward in the past 60 days. The Zacks Consensus Estimate for MMX’s earnings for the quarter is pegged at 4 cents.

Sandstorm Gold Ltd. SAND, scheduled to release earnings on Aug 11, has an Earnings ESP of +7.14% and carries a Zacks Rank #3.

The consensus estimate for Sandstorm Gold’s second-quarter earnings has been revised 25% upward in the past 60 days. The consensus estimate for SAND’s earnings for the quarter is currently pegged at 5 cents.

Sierra Metals Inc. SMTS, scheduled to release earnings on Aug 11, has an Earnings ESP of +50.00%.

The Zacks Consensus Estimate for Sierra Metals' earnings for the second quarter is currently pegged at 2 cents. SMTS currently carries a Zacks Rank #3.

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Cabot Corporation (CBT) : Free Stock Analysis Report
 
Sandstorm Gold Ltd (SAND) : Free Stock Analysis Report
 
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