Cabot Q1 2025 Earnings Report

Calix EPS Results

• Actual EPS: $1.76
• Consensus EPS: $1.74
• Beat/Miss: Beat by +$0.02
• One Year Ago EPS: N/A

Calix Revenue Results

• Actual Revenue: N/A
• Expected Revenue: $997.11 million
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Calix Announcement Details

• Quarter: Q1 2025
• Date: 2/3/2025
• Time: After Market Closes
• Conference Call Date: Tuesday, February 4, 2025
• Conference Call Time: 6:00AM ET

Calix (NYSE:CALX), together with its subsidiaries, engages in the provision of cloud and software platforms, and systems and services in the United States, rest of Americas, Europe, the Middle East, Africa, and the Asia Pacific. Its cloud and software platforms, and systems and services enable broadband service providers (BSPs) to provide a range of services. The company provides Calix Cloud platform, a role-based analytics platform comprising Calix Engagement Cloud, Calix Service Cloud, and Calix Operations Cloud, which are configurable to display role-based insights and enable BSPs to anticipate and target new revenue-generating services and applications through mobile application, such as CommandIQ for residents and CommandWorx for businesses; Calix Intelligent Access EDGE, an access network solution for automated and intelligent networks; and Calix Revenue EDGE, a premises solution for subscriber managed services. It also offers SmartLife managed services, including SmartHome managed services and applications to enhance, operate and secure the connected experience of subscribers in their home; SmartTown managed services that reimagine community Wi-Fi as a ubiquitous, secure, and managed experience across a BSP's footprint; and SmartBiz managed services that address the business networking and productivity needs of business owners with an all-in-one managed service. In addition, the company provides Wi-Fi systems under GigaSpire and GigaPro brands to be ready for deployment as a complete subscriber experience solution for BSP's residential and business subscribers. It offers its products through its direct sales force and resellers. The company was incorporated in 1999 and is headquartered in San Jose, California.

Calix Q1 2025 Earnings Call Transcript

Presentation

[Operator]

Good day. Thank you for standing by, and welcome to Cabot's First Quarter twenty twenty five Earnings Conference Call. At this time, all participants are in a listen only mode.

[Operator]

After the speakers' presentation, there will be a question and answer session.

[Operator]

Please note that today's conference is being recorded.

[Operator]

I will now hand the conference over to your speaker host, David Delahunt, Vice President, Treasurer and Investor Relations. Please go ahead.

[Steven Delahunt, VP of Investor Relations & Treasurer at Cabot]

Thank you, Olivia, and good morning. I would like to welcome you to the Cabot Corporation Earnings Teleconference. With me today are Shawn Culhane, CEO and President and Erica McLaughlin, Executive Vice President and CFO. Last night, we released results for our copies of which are posted in the Investor Relations section of our website. The slide deck that accompanies this call is also available in the Investor Relations portion of our website and will be available in conjunction with the replay of the call.

[Steven Delahunt, VP of Investor Relations & Treasurer at Cabot]

During this conference call, we will make forward looking statements about our expected future operational and financial performance. Each forward looking statement is subject to risks and uncertainties that could cause actual results to differ materially from those projected in such statements. Additional information regarding these factors appears in the press release we issued last night and in our 10 K for the fiscal year ended Sept. 30, 2024, and in subsequent filings we make with the SEC, all of which are also available on the company's website. In order to provide greater transparency regarding our operating performance, we refer to certain non GAAP financial measures that involve adjustments to GAAP results.

[Steven Delahunt, VP of Investor Relations & Treasurer at Cabot]

These the non GAAP financial measures referenced on this call are reconciled to the most directly comparable GAAP financial measure in a table at the end of our earnings release issued last night and available in the Investors section of our website. I will now turn the call over to Sean, who will discuss the highlights, follow the company's recent cash flow performance and then discuss the key takeaways from our recent Investor Day we held in Dec. 0. Will review the financial highlights and the business segment results. Following this, Sean will provide a strategic summary and closing comments and open the floor to questions.

[Steven Delahunt, VP of Investor Relations & Treasurer at Cabot]

Sean?

[Sean Keohane, President & CEO at Cabot]

Thank you, Steve, and good morning, ladies and gentlemen. Welcome to our call today. In the we continued to execute at a high level in a mixed economic environment, generating results in line with our expectations and leading to EBIT growth in both of our segments. We delivered adjusted earnings per share of 1.76 which is up 13% as compared to the same period in the prior year, positioning us well with a strong start to I would like to thank our entire global Cabot team for their agility and continued commitment to execution as we navigate these dynamic times. EBIT in Reinforcement Materials was $130,000,000 up 1% year over year in what remains a challenging global environment.

[Sean Keohane, President & CEO at Cabot]

Results in this business continue to demonstrate the value of the structural improvements we have made over the years to the business and our continued commitment to commercial and operational excellence. EBIT in Performance Chemicals was up 32% compared to the largely due to higher volumes as demand in the segment has generally stabilized and volumes have reconnected to underlying demand drivers in key end markets. Cash flow was strong in the quarter, which supported investments in maintenance, compliance and growth capital projects, as well as the return of cash to shareholders through a combination of share repurchases and dividends. The Cabot portfolio has strong cash flow characteristics, which enables a balanced capital allocation strategy focused on funding our high confidence, high return growth projects and returning cash to shareholders. This balance of profit growth and cash return can be achieved while maintaining our strong investment grade balance sheet.

[Sean Keohane, President & CEO at Cabot]

In the quarter, we generated operating cash flow of $124,000,000 We also invested $77,000,000 in capital expenditures, which included growth investments to construct our new Indonesia capacity for reinforcement materials and capacity for growth in battery materials. We also returned $66,000,000 to shareholders to $24,000,000 of dividends and $42,000,000 of share repurchases. Since our dividend per share has grown at a compound annual growth rate of 8%. We remain committed to a continuous and growing dividend and expect to maintain an industry competitive dividend yield and payout ratio over time. We also believe that share repurchases are an attractive use of cash.

[Sean Keohane, President & CEO at Cabot]

In this quarter, we purchased 42,000,000 of shares. Looking over a longer horizon, we've reduced our outstanding share count by 13% since as we have maintained a steady commitment to share repurchases. During the quarter, we also held an Investor Day in Dec. 0. We appreciate the support from our investors as we had a great turnout.

[Sean Keohane, President & CEO at Cabot]

I'd like to now provide a brief recap of this event. During the day, we reviewed the successful achievement of our twenty twenty one Investor Day goals, discussed our company vision and strategy, provided an outlook for our segments and communicated an updated set of three year financial targets. As I shared at Investor Day, I believe that Cabot offers a compelling investment thesis. Our creating for tomorrow strategy is the right one to drive continued growth and shareholder value creation. This strategy is built on the pillars of grow, innovate and optimize, and we drive execution with a disciplined operating platform of commercial and operational excellence.

[Sean Keohane, President & CEO at Cabot]

Our excitement and confidence in our outlook for Grove is underpinned by our global footprint and the strong product portfolio that is aligned with three key macro trends. The first macro trend is the changing mobility landscape towards electric vehicles, which is expected to drive growth across the Cabot portfolio. Second, the build out of global infrastructure is expected to drive demand for important applications in our portfolio from specialty carbons for power distribution cables to fumed silica for wind turbine blades. And third, the sustainability transition, where our customers are increasingly seeking more circular and sustainable offerings to meet the needs of their downstream customers. We have set clear growth goals targeting an adjusted earnings per share CAGR of 7% to 10% over the next three years with growth expected in both business segments.

[Sean Keohane, President & CEO at Cabot]

This management team has a proven track record of execution over a long period of time and we are committed to continuing that high level of execution going forward. And finally, cash flow and capital allocation. The Cabot portfolio has strong cash flow characteristics, and this is the source of our value creation strategy. We expect to continue growing the discretionary free cash flow of the company and will deploy that cash in a balanced and disciplined fashion with a focus on funding advantaged growth investments and returning significant levels of capital to shareholders. The execution of our strategy has driven exceptional shareholder value creation over the last three years.

[Sean Keohane, President & CEO at Cabot]

We are very proud of that track record and are confident will continue to be the same in the coming years. I'll now turn the call over to Erica to discuss the segment and financial performance in the quarter. Erica?

[Erica McLaughlin, EVP, CFO and Head of Corporate Strategy at Cabot]

Thanks, Sean. I will start with discussing results for the company and then review the segment results. Adjusted earnings per share for the grew 13% from $1,.56 in the to $1,.76 with growth coming from both the Reinforcement Materials and Performance Chemicals segments. As Sean noted, cash flow from operations was strong at $124,000,000 in the quarter, which included a working capital increase of $38,000,000 Discretionary free cash flow was $114,000,000 in the quarter. We ended the quarter with a cash balance of $183,000,000 and our liquidity position remains strong at approximately $130,000,000,0.0 Capital expenditures for the were $77,000,000 and we continue to expect $2.50,000,000 dollars to $300,000,000 of capital spending for the fiscal year.

[Erica McLaughlin, EVP, CFO and Head of Corporate Strategy at Cabot]

Additional uses of cash during the first quarter were $24,000,000 for dividends and $42,000,000 for share repurchases. Our debt balance was $120,000,000,0.0 and our net debt to EBITDA was 1.3 times. The operating tax rate for the was 28% and we continue to anticipate our operating tax rate for to be in the range of 27% to 29%. Now moving to Reinforcement Materials. During the EBIT for Reinforcement Materials was $130,000,000 which was an increase of $1,000,000 as compared to the same period of the prior year.

[Erica McLaughlin, EVP, CFO and Head of Corporate Strategy at Cabot]

The increase was driven by higher volumes and favorable pricing and product mix from the calendar year 2024 customer agreements, partially offset by a less favorable geographic mix and lower energy center revenue. Globally, volumes were up 1% in the as compared to the same period of the prior year due to 2% growth in Asia Pacific and 1% in Europe as demand in those regions improved. Looking to the we expect Reinforcement Materials EBIT to improve modestly as compared to the Volumes are expected to remain relatively consistent with the We anticipate a more favorable geographic mix with seasonal volume improvement and the impact from contract gains in Europe, offset by lower volumes in Asia due to the Lunar New Year holiday. Now turning to Performance Chemicals. EBIT increased by $11,000,000 in the as compared to the same period in The increase in the was due to higher volumes across the segment, partially offset by higher costs.

[Erica McLaughlin, EVP, CFO and Head of Corporate Strategy at Cabot]

Volumes were higher by 8% in the quarter compared to the same period in the prior year as we saw volumes reconnect to underlying demand drivers as compared to the destocking behavior in the prior year. Costs were higher due to the timing of plant maintenance and the impact of new assets in the segment. Looking ahead to the we expect modest sequential EBIT improvement from seasonally higher volumes in North America and Europe. I will now turn the call back over to Sean to discuss the fiscal year outlook. Sean?

[Sean Keohane, President & CEO at Cabot]

Thanks, Erica. Moving to our 2025 outlook, we feel good about the results and we are reaffirming our outlook for adjusted earnings per share in the range of $7.4 to $7.8 In terms of assumptions that underpin our outlook, the Reinforcement Materials segment is expected to remain at a similarly strong level of EBIT for the fiscal year as compared to This is based on our current view that global production levels for the tire and auto markets are expected to be relatively flat year over year. We expect to see an increase in volumes as our new capacity comes online in Indonesia in the back half of the year and ramps up into 2026. Also included in our outlook is the impact from the Reinforcement Materials customer negotiations. Overall, base prices on a global basis concluded similar to the prior year with volumes higher in Europe, but lower in South America.

[Sean Keohane, President & CEO at Cabot]

The outlook includes pricing and mix outcomes as it relates to the expected regional and customer volumes, as well as cost changes and continued operational improvements. On balance, given the weaker market environment, we concluded the customer negotiations with reasonable outcomes. We believe commercial excellence is an important competency and we will continue to pursue a disciplined approach so that we are paid a fair value for the investments we have made to ensure supply reliability, quality, innovation and sustainability leadership. In terms of Performance Chemicals, given that volumes have reconnected with underlying demand fundamentals, the segment is expected to continue to perform in the current EBIT range of $45,000,000 to $55,000,000 per quarter for the year, with volume growth expected year over year. This range would result in strong year over year EBIT growth for the fiscal year as higher volumes contribute meaningfully to EBIT performance.

[Sean Keohane, President & CEO at Cabot]

We expect volume growth across our application set, specifically benefiting from the build out of global infrastructure, where our products play an important role in the manufacture of wind turbine blades as well as the performance of power distribution cables. As the agent grid is renewed and new distribution lines are laid to connect alternative energy sources to the grid, we expect our products geared to wind energy and the wire and cable application to grow strongly. Our outlook includes foreign currency rates and market interest rate projections as of the January,. Our current guidance does not include any adverse impacts from the tariffs announced over the weekend between The U. S, Mexico, Canada and China.

[Sean Keohane, President & CEO at Cabot]

Given the timing of the tariff announcements and related delays, we are still assessing the potential impact. The impact could be a bit different by country. For China, we import a very limited amount of volume from China into The U. S, so we expect the direct impact of these tariffs to be minimal. If production in China is reduced for tires or other exported products, then our demand in China could be impacted.

[Sean Keohane, President & CEO at Cabot]

However, we would then expect to see production levels outside of China potentially increase. For Mexico, where we operate one reinforcement materials plant, we expect a minimal direct impact on our production in Mexico as it is primarily sold into the Mexican market. For Canada, we operate two plants that manufacture products for our reinforcing carbons, specialty carbons and specialty compounds product lines. A large portion of the production at these plants is sold in Canada, but also there is production sold to customers in The U. S.

[Sean Keohane, President & CEO at Cabot]

Carbon black products that we produce in Canada and sell into The U. S. Represents approximately 10% of the carbon black we sell in North America. Almost all of these customers are under agreements that allow Cabot to pass through taxes and similar charges such as tariffs. We are also working with our customers on potential alternative supply sources within our large plant network.

[Sean Keohane, President & CEO at Cabot]

In all cases, if the tariffs are implemented, there could be a downstream impact on our customers' businesses, and this could impact underlying demand levels. We are working to better assess the broader impacts of these tariffs on things such as GDP, foreign currency rates, inflation and overall demand. The situation remains very dynamic and developing a full understanding of this will take time as we observe how negotiations evolve. Cash generation is expected to remain strong and we expect to return a robust amount of cash to shareholders through dividends and share repurchases. Our Board's recent $10,000,000 share repurchase authorization supports our expectation of continued share repurchases.

[Sean Keohane, President & CEO at Cabot]

We continue to execute our growth agenda and remain on track for additional capacity to come online in Indonesia for reinforcement materials in the back half of the fiscal year and with our continued capacity investments in battery materials in China. Overall, I'm very pleased with how the company is positioned today. I believe we have the right strategy and capital allocation priorities and I'm confident in our team's agility and execution capabilities. Thank you very much for joining us today. And I'll now turn the call over for our question and answer session.

[Operator]

Thank you. Our first question coming from the line of Joshua Spector with UBS. Your line is now open.

[Christopher Perrella, Equity Research Analyst at UBS Group]

Hi, good morning, everyone. It's Chris Perrella on for Josh. Could you just dig a little more on the contract terms for reinforced materials that you realized in 2025 and how they compare to the last couple of years? And then is there any benefit still left over from the big increases that you got in 2023? I know some of those contract terms were extended out a couple of years.

[Sean Keohane, President & CEO at Cabot]

Hi, Chris. How are you? Yes, let me provide an update on the contract outcomes here. So as I think you'll recall, pricing in our customer agreements is comprised of a base price as well as adjusters that change each month for changing input costs and other costs. In terms of the base prices, we remain relatively flat year over year for our calendar year 2025 agreements as compared to the 2024 agreements.

[Sean Keohane, President & CEO at Cabot]

And then in terms of volumes, as expected, we increased volumes in Europe as many customers were looking for additional supply given the sanctions on Russian and Belarusian supply that came into full effect in the 2024 calendar year. However, volumes in The Americas were challenging given the continued import of Asian tires into the region. And so in North America, our contract volumes concluded pretty consistent with last year, but we did see a reduction in volumes in South America. I think overall, if you look at the Reinforcement Materials segment, we're expecting that based on those outcomes and a number of other factors that go into running the business that will remain at a similarly strong level of EBIT for as compared to 2024 despite a challenging macro environment. As we look at the end markets here, certainly production levels for tires and auto OE are expected to remain relatively flat year over year.

[Sean Keohane, President & CEO at Cabot]

So the underlying sort of market backdrop is not so strong. It's pretty flattish. We do expect, as I mentioned in my prepared remarks, that we'll see an increase in volumes as we exit the back part of the year as our new capacity in Indonesia comes back online. So I think overall, when you look at the outcomes here and the expectation for this segment, it includes the pricing and mix outcomes as it relates to the expected regional and customer volumes, as well as cost changes and of course continued operational excellence improvements in the business. We've talked about that quite a bit at the Investor Day.

[Christopher Perrella, Equity Research Analyst at UBS Group]

No, I appreciate that. Thank you. And then just with the Indonesia start up, how should we expect EBIT to improve off of that or are there some start up headwind costs you have to overcome as you load volume into the plant?

[Sean Keohane, President & CEO at Cabot]

Yes, that's exactly right. I mean, typically what you see is that the plant will start up in the back half of the year and then you have to work through customer qualifications and then the ramp of volume. So we'd certainly be expecting a material contribution in 2026 with, I would say, very modest back half benefit in 2025, low single digit millions kind of as you're really absorbing the cost and starting up and then working through that customer qualification period. So modest in the back half of this year and then of course ramping up sharply in 2026.

[Christopher Perrella, Equity Research Analyst at UBS Group]

Thank you, Sean.

[Operator]

Thank you. Our next question coming from the line of John Roberts with Mizuho Group. Your line is now open.

[John Roberts, Managing Director at Mizuho Financial Group]

Thank you. A nice quarter. Is it fair to say you're benefiting from the increased tire imports into The U. S, that your Asian customers' volume growth is outpacing any impact you're having to your U. S.

[John Roberts, Managing Director at Mizuho Financial Group]

Customers?

[Sean Keohane, President & CEO at Cabot]

Hey, John. Thanks for the comments on the quarter. So as you know, we participate in a very global way. So really no matter where volumes develop in the world, I would say we're able to secure our share of those volumes. And I think that's again a function of our global footprint.

[Sean Keohane, President & CEO at Cabot]

But there are differences in margin levels by region. And so in the Western regions, we do earn higher margins there, the dynamics in place there in terms of supply and investments that are required around sustainability and supply security and all those factors drive a different margin profile. So as Asian imports have increased, I would say that has been a headwind that we've had to absorb from a margin standpoint, even though the volumes we do capture because of the very distributed footprint that we have. But we've been able to manage that pretty well and our expectation going forward is that we would continue to manage that in terms of the underlying financial performance of the business and continuing to consolidate the structural improvements that we've made in this business over a number of years.

[John Roberts, Managing Director at Mizuho Financial Group]

And then in specialty blacks, oil prices have been rising. Do you need to go out to get additional price here to kind of hold your margins in specialty blacks?

[Sean Keohane, President & CEO at Cabot]

Yes. Generally, that's the case, John. We do have some formula arrangement similar to reinforcement materials, but this business tends to be more oriented towards spot pricing. And so we would be out in the marketplace adjusting prices to deal with that. And I think as you've probably followed in our commentary here over the last many years, we've done a real good job of managing the margins here in this and that's certainly what our expectation is as we go forward.

[John Roberts, Managing Director at Mizuho Financial Group]

Great. Thank you.

[Operator]

Thank you. Our next question coming from the line of David Begleiter with Deutsche Bank. Your line is now open.

[David Begleiter, Managing Director at Deutsche Bank]

Thank you. Good morning. Sean, on reinforcement earnings for 2025, I believe your initial guidance was for it to be up year over year. Now it's flat. Is that due to the outcome of the tire contract negotiations?

[David Begleiter, Managing Director at Deutsche Bank]

Were they worse than expected? And was it due to a more competitive market end of the day? Thank you.

[Sean Keohane, President & CEO at Cabot]

Hey, David. Thanks. So our outlook for Reinforcement Materials is to be operating at a similarly strong level as we did in 2024. Obviously, a number of factors go into this outlook. At sort of a market level, the underlying demand expectation globally for tire production and for auto OE is pretty flat.

[Sean Keohane, President & CEO at Cabot]

So that's sort of the basic sort of market environment that we're in. As I said in the prepared comments that our pricing and the contract outcomes concluded I think in a reasonable place here. Base pricing maintained relatively flat year over year. We did pick up some volumes in Europe as expected as the final impact of sanctions went into place. But in The Americas, the impact of tire imports has challenged the demand outlook from customers.

[Sean Keohane, President & CEO at Cabot]

So that's certainly another factor. And then there are other moving parts as you know well in this sort of complex global business in terms of FX rates that are headwind and energy center movements and obviously offsetting cost inflation through operational excellence. All of those factors come together to have us expecting a result in a similar level to 2020, '20 '20 04/00. So that's how I would sort of think through it. And again, starting with the underlying demand fundamentals are pretty flattish for our end markets.

[David Begleiter, Managing Director at Deutsche Bank]

Understood. And going back to an earlier question, on those '23 contracts, for sure, some were multi year, are those benefits still flowing through to you on a base price impact?

[Sean Keohane, President & CEO at Cabot]

We did not have any multi years that extended from 2023 into 2025, no.

[Operator]

Our next question coming from the line of Kevin Espich with Jefferies. Your line is now open.

[Kevin Estok, Equity Research Senior Associate at Jefferies LLC]

Hi. This is Kevin actually on for Laurence Alexander. Thank you for taking my question. I just wanted to dig a little deeper on some of your end markets. I guess, specifically, what's your outlook on sort of the non auto related sales on 2025?

[Sean Keohane, President & CEO at Cabot]

Sure. Hi, Kevin. So the non auto related sales would, of course, be primarily concentrated in our Performance Chemicals segment, which is made up of end market exposures that include auto OE, but also infrastructure and industrial applications, consumer applications, as well as the building and construction end market sectors. So in our Investor Day, we outlined sort of what those exposures look like. We're certainly seeing strength in our infrastructure related end markets.

[Sean Keohane, President & CEO at Cabot]

And I think that's driven a lot by expansion in alternative energy that continues to grow. Energy demand in general is rising, driven in part by AI and data center needs, but also because of renewal of the aging grid infrastructure. So there's both demand increase as well as renewal that's I think driving a good outlook in some of these broader industrial exposures that we participate in. I would say our consumer market exposures, we would expect to track pretty closely with GDP outlooks. And then on housing and construction, that remains, I would say, more muted.

[Sean Keohane, President & CEO at Cabot]

Certainly, if we go deeper into a rate cut cycle, then we'd expect to see some benefit building in housing and construction. But I don't think there's really any strong evidence of those markets picking up. I would say they're sort of stable and maybe bouncing along at the bottom right now, but it will really come down to how rates move. If you sort of boil it all up for Performance Chemicals, we're expecting good solid growth rates in the sort of mid single digits, maybe a little higher across the whole basket of applications for the fiscal year, but with some differences depending on applications.

[Kevin Estok, Equity Research Senior Associate at Jefferies LLC]

Understood. Thank you. And since you just mentioned great, this question is I guess regarding a cyclical turn, I guess, it seems like some expectations around credit easing and stimulus have maybe eased a bit. And I guess I was just wondering, I mean, you guys gave an outlook for sort of the back half of the year, but I mean, I guess in terms of the turn, I mean, I guess it sounds like you maybe sound it sounds like you're expecting something more like a gradual improvement rather than a sort of a more significant turn?

[Sean Keohane, President & CEO at Cabot]

Yes. Kevin, it was difficult to hear the first part of your question. Would you mind just repeating that for me?

[Kevin Estok, Equity Research Senior Associate at Jefferies LLC]

Sure. Yes. So basically since you mentioned rates and this question is about cyclical turn, right? I guess it sounds like you're it sounds like you expect the improvement to be a little bit more gradual rather than like a quick turn. I've heard some other company managements basically sort of temper expectations and call for improvement to be a little bit more gradual.

[Sean Keohane, President & CEO at Cabot]

Yes. Okay, great. Yes. No, I missed the word rates when you were talking about the turn there. So well, I think what we have in our outlook is sort of the market expectation for rate cuts through the balance of the year.

[Sean Keohane, President & CEO at Cabot]

That in more recent months that has been tempered versus I think where it was some months ago where there was I think a higher expectation for number of rate cuts in 2025. So I think it probably will be a little more gradual as the world still and central banks still try to balance this growth versus getting to inflation targets. We're not still quite there yet. So I think that it will be probably a little more gradual and how that ultimately trickles down into housing and construction is obviously a delay or an onset delayed onset for that to happen. So I think that's right.

[Sean Keohane, President & CEO at Cabot]

It will be a little more gradual when those end markets that are very sensitive to rates and that's largely what our expectation is. And of course, when you bake that in with all the other end market exposures that we have in Performance Chemicals, again, we're expecting overall volume growth rates to be quite good and in sort of mid single digits to maybe a little bit better.

[Kevin Estok, Equity Research Senior Associate at Jefferies LLC]

Got it. Thank you very much.

[Operator]

Thank you. Our next question coming from the line of Jeff Zekauskas with JPMorgan. Your line is now open.

[Lydia H, VP - Equity Research at JP Morgan Chase & Co]

Hi, this is Lydia Huang on for Jeff. Can you talk about which product lines within the Performance Chemicals segment drove the 8% volume growth? Was it, silicon, battery materials, masterbatch or others? And if all product lines grew, which ones grew more and which ones less? Thank you.

[Erica McLaughlin, EVP, CFO and Head of Corporate Strategy at Cabot]

Hi, Lydia. This is Erica. So we did see growth across all product lines within the segment year over year. If we comment on the larger businesses, carbons and compounds grew more in a 5% to 6% range. And then our few metal oxide product line grew the most, more around a 20% growth rate.

[Lydia H, VP - Equity Research at JP Morgan Chase & Co]

Okay. Thank you. And could you quantify the year over year Energy Center revenue loss? Was it more or less than $30,000,000 this quarter? And which region contributed to the decline?

[Erica McLaughlin, EVP, CFO and Head of Corporate Strategy at Cabot]

Sure. So again, the loss on an EBIT type basis or margin basis was about $5,000,000 headwind year over year in the Reinforcement Materials segment, driven both by Europe and China revenue.

[Lydia H, VP - Equity Research at JP Morgan Chase & Co]

Thank you. And allocated corporate costs were $4,000,000 less negative year over year. So what drove that? And is that going to be the case for the next three quarters?

[Erica McLaughlin, EVP, CFO and Head of Corporate Strategy at Cabot]

So that was really just the timing of some corporate expenses, I'd say. So lower spend on some corporate meetings as well as board related costs. So that would be why year over year we're down $4,000,000 If you look to the remainder of the quarters, I think you would see a little bit higher, probably more in the $14,000,000 to $16,000,000 per quarter range for the rest of the year. Usually just because of the timing of certain expenses is a bit higher than the other quarters.

[Operator]

Thank you. Thank you. And I'm showing no further questions in the queue at this time. I will now turn the call back over to Mr. Sean Cohen for any closing remarks.

[Sean Keohane, President & CEO at Cabot]

Great. Thank you very much for joining us today and we appreciate your continued support of Cabot. It was great to see you all at our Investor Day a little over a month ago and we look forward to speaking with you again next quarter. Thank you.

[Operator]

This does conclude today's conference. Thank you for your participation. You may now disconnect.

Participants

Analysts

• Steven Delahunt, VP of Investor Relations & Treasurer at Cabot
• Sean Keohane, President & CEO at Cabot
• Erica McLaughlin, EVP, CFO and Head of Corporate Strategy at Cabot
• Christopher Perrella, Equity Research Analyst at UBS Group
• John Roberts, Managing Director at Mizuho Financial Group
• David Begleiter, Managing Director at Deutsche Bank
• Kevin Estok, Equity Research Senior Associate at Jefferies LLC
• Lydia H, VP - Equity Research at JP Morgan Chase & Co