Cabot Corporation announced results for its second quarter of fiscal year 2014.
-Strong volumes in Reinforcement Materials and Performance Materials
-Purification Solutions delivered sequential improvement in EBIT
-Announced the divestiture of the Security Materials business for approximately $20 million
-New PROPELTM carbon black products launched for tire applications
For the second quarter of fiscal 2014, net income attributable to Cabot Corporation was $36 million ($0.54 per diluted common share). Due to the agreement to divest the Security Materials business, financial results of this business are included as discontinued operations for all periods presented. Net income includes a per share charge of $0.01 for discontinued operations. Net income also includes a per share charge of $0.28 from certain items, principally reflecting charges associated with restructuring actions and an increase in the environmental reserve. Adjusted EPS for the second quarter of fiscal 2014 was $0.83 per share.
Reinforcement Materials -- Second quarter fiscal 2014 EBIT in Reinforcement Materials increased by $19 million compared to the second quarter of fiscal 2013 principally due to 15% higher volumes from improved demand and the addition of new capacity in China and Mexico. Raw material purchasing savings and benefits from energy efficiency investments also contributed to the improvement in earnings. Sequentially, EBIT decreased by $3 million due to 2% lower volumes reflecting the impact of the Chinese new year holiday during the quarter and a challenging South American economic and political environment.
Commenting on the results, Cabot President and CEO Patrick Prevost, said, “We achieved another strong quarter of business performance in fiscal 2014. The Performance Materials segment delivered a record EBIT and volumes increased as compared to the prior year in both the Performance Materials and Reinforcement Materials segments. Demand in our key end markets improved and we commercialized new capacity. Purification Solutions EBIT improved sequentially as a result of revenue growth and lower fixed costs.
“At the corporate level, we saw slightly higher unallocated costs associated with increased project activity and a higher tax rate due to the expiration of the R&D tax credit in the U.S. and the geographic mix of earnings. On the strategic front,” Prevost continued, “we announced our plans to divest our Security Materials business at an attractive value for our shareholders. In addition, our new product introductions continue to accelerate and during the quarter we launched a new PROPELTM line of carbon black products for tire applications that offer lower rolling resistance and improved durability for our tire customers.”