CABOT REPORTS SECOND QUARTER OPERATING RESULTS - EPS $0.52 versus $0.39 for year ago quarter -

Apr 25, 2001, 01:00 ET from Cabot Corporation

    BOSTON, April 25 /PRNewswire/ -- Cabot Corporation (NYSE:   CBT) today
 announced net income of $40 million from continuing operations, or $0.52 per
 diluted common share before a special charge of $12 million, net of tax, for
 the Company's second fiscal quarter ended March 31, 2001.  In the same quarter
 last year, the Company reported $28 million, or $0.39 per diluted common share
 on a continuing operations basis.  Cabot reported operating profit of $60
 million for the quarter before a special item, compared with $56 million for
 the same quarter of 2000.
     (Photo:  http://www.newscom.com/cgi-bin/prnh/20000323/CABOTLOGO)
     Kennett F. Burnes, Cabot's President and CEO, commented, "In today's
 challenging economy, we are generally pleased with the operating results in
 our businesses.  Our chemical businesses experienced lower volumes,
 particularly in North America.  Like other manufacturing companies, we
 continue to struggle with the effects of a weaker economy.  However, we are
 extremely pleased with the performance of our tantalum business.  Similarly we
 continue to see progress in customer acceptance of our specialty fluids and
 inkjet colorants businesses."
     The chemical businesses reported a $14 million decline in operating profit
 over the same quarter last year.  "Carbon black and fumed metal oxides
 continue to face weakening demand for their traditional products," Burnes
 commented.  The carbon black business experienced a 6% decrease in volumes,
 primarily resulting from lower demand in North America.  The business
 continued its efforts to recover margin with higher prices and lower
 production costs to help offset higher energy costs.  In addition, Carbon
 Black faced higher administrative costs due to corporate initiatives as well
 as an unfavorable currency impact.
     Cabot's Fumed Metal Oxide's business reported a $2 million decrease in
 operating profit for the quarter resulting from weaker volumes in our
 traditional businesses.  This business also faced higher cost of goods,
 including raw materials and energy, as well as an unfavorable currency impact.
     "On a more positive note," Burnes continued, "our tantalum business has
 been able to successfully execute its plans and meet the higher demands of the
 contracts put in place last quarter."  Cabot Performance Materials contributed
 an incremental $18 million in operating profit year over year resulting from
 higher prices and volumes, partially offset by higher costs.  Revenues in the
 business were up 91%, driven by 26% higher average volumes, and 56% higher
 average prices.  Total costs for the business were up 67%, resulting
 principally from greater volumes and higher raw materials costs.  The business
 continues to benefit from strong demand for tantalum powder and wire driven by
 the need for tantalum capacitors from the telecommunications and electronics
 sectors.
     Cabot Specialty Fluids participated in four completion applications, and
 two successful drill-in applications of the Company's cesium brine oilfield
 fluids during the March quarter.  Burnes commented, "The drill-ins have been
 very successful, and have marked another milestone for this business.  Cesium
 formate was used in a situation where conventional products failed, and it
 successfully maintained pressure and integrity of the well.  We are now
 awaiting the results of the productions flow tests."  Cesium formate continues
 to gain market acceptance in high pressure high temperature wells in the North
 Sea, and reported flat operating profit, quarter over quarter.
     Burnes continued, "We are pleased with our financial results given the
 current economic circumstances.  While the chemical businesses will continue
 to struggle with the effects of the overall economic downturn, we are
 confident in our ability to manage those factors that are in our control.  The
 tantalum business delivered results above even our own expectations by
 achieving greater than expected volumes in the second quarter.  We would
 expect these volumes to moderate slightly in the third and fourth quarters.
 We are pleased with the corporate and world-wide initiatives that the Company
 has undertaken, including the share repurchase program, the legal entity
 reorganization which resulted in a lower effective tax rate, and the company-
 wide enterprise resource planning initiative."
     "After fourteen years as Chairman and CEO, Samuel W. Bodman will retire
 from Cabot Corporation in May.  We will miss the leadership and guidance that
 he provided for so many years."
     Cabot Corporation is a global company with operations in chemicals and
 specialty materials.
     Forward Looking Information:  Included above are statements relating to
 management's expectations of future profits, the possible achievement of the
 Company's financial goals and objectives and management's expectations for
 shareholder value creation initiatives and for the Company's product
 development program.  Actual results may differ materially from the results
 anticipated in the statements included herein due to a variety of factors,
 including market supply and demand conditions, fluctuations in currency
 exchange rates, costs of raw materials, patent rights of others, stock market
 conditions, demand for our customers' products and competitors' reactions to
 market conditions.  Timely commercialization of products under development by
 the Company may be disrupted or delayed by technical difficulties, market
 acceptance, competitors' new products, as well as difficulties in moving from
 the experimental stage to the production stage.
 
 
     Second Quarter Earnings Announcement, Fiscal 2001
 
     CABOT CORPORATION SUMMARY RESULTS BY SEGMENTS
 
                                                Three Months      Six Months
     Periods ended March 31
     In millions, except per share amounts
      (unaudited)                              2001     2000     2001     2000
 
     SALES
 
     Chemical Businesses                       $357     $339     $691     $669
     Performance Materials                      103       54      159      105
     Specialty Fluids                             5        6       12       10
        Segment sales (A)                       465      399      862      784
     Unallocated and other (B)                   (7)      (2)      (9)     (10)
        Net sales and other operating
         revenues                              $458     $397     $853     $774
 
     SEGMENT PROFIT
 
     Chemical Businesses                        $35      $49      $76     $102
     Performance Materials                       26        8       23       16
     Specialty Fluids                            (1)      (1)       -       (3)
        Total segment profit (C) - Before
         special items                           60       56       99      115
     Special Items(G)                           (17)       -      (17)       -
        Total segment profit                     43       56       82      115
 
     INCOME APPLICABLE TO COMMON SHARES
 
     Interest expense                            (9)      (9)     (17)     (18)
     General unallocated
      income (expense)(D)                         6       (2)      16       (2)
     Less: Equity in net income of
      affiliated companies                       (4)      (2)      (8)      (3)
     Income from continuing operations
      before income taxes                        36       43       73       92
     Provision for income taxes                 (10)     (16)     (21)     (33)
     Equity in net income of affiliated
      companies                                   4        2        8        3
     Minority interest                           (2)      (1)      (4)      (3)
     Income from Continuing Operations           28       28       56       59
     Discontinued Operations
        Income from Operations of
         Discontinued Businesses,
         net of income taxes (E)                  -       13        -       20
        Gain on Sale of Business, net of
         income taxes(F)                          3        -        3        -
        Net income                               31       41       59       79
     Dividends on preferred stock                (1)      (1)      (2)      (2)
       Income applicable to common shares       $30      $40      $57      $77
 
     DILUTED EARNINGS PER SHARE OF COMMON STOCK
 
        Continuing Operations Before
         Special Items                        $0.52    $0.39    $0.89    $0.80
        Discontinued Operations(E)              -       0.18      -       0.27
        Gain on Sale of Business(F)            0.04      -       0.04      -
        Before Special Items                   0.56     0.57     0.93     1.07
        Special Items(G)                      (0.16)     -      (0.16)     -
        Net Income                            $0.40    $0.57    $0.77    $1.07
 
     WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
 
        Diluted                                  76       73       76       73
 
     (A) Segment sales for certain operating segments within Chemical
         Businesses include 100% of equity affiliate sales and transfers of
         materials at cost and at market-based prices.
 
     (B) Unallocated and other reflects an adjustment for equity affiliate
         sales and interoperating segment revenues and includes royalties paid
         by equity affiliates offset by external shipping and handling costs.
 
     (C) Segment profit is a measure used by Cabot's chief operating decision-
         makers to measure consolidated operating results and assess segment
         performance.  It includes equity in net income of affiliated
         companies, royalties paid by equity affiliates, minority interest and
         corporate governance costs, and excludes interest expense, foreign
         currency transaction gains (losses), interest income and dividend
         income.
 
     (D) General unallocated income (expense) includes foreign currency
         transaction gains (losses), interest income, dividend income and
         corporate allocations previously allocated to discontinued segments.
 
     (E) The Liquefied Natural Gas (LNG) and Microelectronics businesses are
         presented as discontinued operations.
 
     (F) Additional proceeds from the sale of the LNG business, net of tax.
 
     (G) Results for the second quarter of fiscal 2001 include a charge related
         to the retirement of the Chief Executive Officer.  Included in the
         charge is $10 million relating to the accelerated vesting of shares
         issued under the Long Term Incentive Compensation Plan and a $7
         million cash payment.
 
 
     Second Quarter Earnings Announcement, Fiscal 2001
 
     CABOT CORPORATION CONSOLIDATED STATEMENTS OF INCOME
 
     Periods ended March 31                  Three Months       Six Months
     Dollars in millions, except per
      share amounts (unaudited)              2001    2000(A)   2001    2000(A)
 
     REVENUES
 
         Net sales and other operating
          revenues                           $458     $397     $853     $774
         Interest and dividend income           7        1       18        2
            Total revenues                   $465     $398     $871     $776
 
     COSTS AND EXPENSES
 
         Cost of sales                       $339     $291     $644     $559
         Selling and administrative
          expenses                             52       44       97       85
         Research and technical expenses       12       11       23       21
         Interest expense                       9        9       17       18
         Special items (B)                     17        -       17        -
         Other charges, net                     -        -        -        1
            Total costs and expenses         $429     $355     $798     $684
     Income from continuing operations
      before income taxes                     $36      $43      $73      $92
     Provision for income taxes               (10)     (16)     (21)     (33)
     Equity in net income of affiliated
      companies                                 4        2        8        3
     Minority Interest                         (2)      (1)      (4)      (3)
     Income from Continuing Operations         28       28       56       59
     Discontinued Operations
         Income from Operations of
          Discontinued Businesses,
             net of income taxes (C)            -       13        -       20
         Gain on Sale of Business, net of
          income taxes (D)                      3        -        3        -
         Net Income                            31       41       59       79
     Dividends on preferred stock              (1)      (1)      (2)      (2)
         Income applicable to common
          shares                              $30      $40      $57      $77
 
     DILUTED EARNINGS PER SHARE OF COMMON
      STOCK
 
         Continuing Operations Before
          Special Items                     $0.52    $0.39    $0.89    $0.80
         Discontinued Operations(C)           -       0.18      -       0.27
         Gain on Sale of Business(D)         0.04      -       0.04      -
         Before Special Items                0.56     0.57     0.93     1.07
         Special Items(B)                   (0.16)     -      (0.16)     -
         Net Income                         $0.40    $0.57    $0.77    $1.07
 
     WEIGHTED AVERAGE COMMON SHARES
      OUTSTANDING
 
         Diluted                               76       73       76       73
 
 
 
     (A) Certain amounts in 2000 have been reclassified to conform to the 2001
         presentation.
 
     (B) Results for the second quarter of fiscal 2001 include a charge related
         to the retirement of the Chief Executive Officer.  Included in the
         charge is $10 million relating to the accelerated vesting of shares
         issued under the Long Term Incentive Compensation Plan and a $7
         million cash payment.
 
     (C) The Liquefied Natural Gas (LNG) and Microelectronics businesses are
         presented as discontinued operations.
 
     (D) Additional proceeds from the sale of the Liquefied Natural Gas
         business, net of tax.
 
 
     Second Quarter Earnings Announcement, Fiscal 2001
 
     CABOT CORPORATION CONDENSED CONSOLIDATED FINANCIAL POSITION
 
                                                  March 31,           Sept. 30,
     In millions, (unaudited)                       2001                2000
 
     Current assets                                $1,081              $1,190
     Net property, plant and equipment                773                 806
     Other non-current assets                         155                 138
               Total assets                        $2,009              $2,134
 
 
     Current liabilities                             $276                $494
     Non-current liabilities                          712                 593
     Stockholders' equity                           1,021               1,047
               Total liabilities and
                stockholders' equity               $2,009              $2,134
 
     Working capital                                 $805                $696
 
 
     CABOT CORPORATION
 
     In millions, except per share amounts
 
                                            Fiscal 2000
                   Dec. Q.       Mar. Q.      June Q.     Sept. Q.       FY
 
     Sales
     Chemical
      Businesses      $330         $339         $357         $334      $1,360
     Performance
      Materials         51           54           56           54         215
     Specialty
      Fluids             4            6            6            4          20
     Segment
      Sales (A)        385          399          419          392        1595
     Unallocated
      and other (B)    (8)           (2)          (5)          (5)        (21)
     Net sales and
      other operating
      revenues        $377         $397         $414         $387      $1,574
     Segment Profit
     Chemical
      Businesses       $53          $49          $48          $30        $180
     Performance
      Materials          8            8           10           12          38
     Specialty Fluids  (2)           (1)           -            -          (3)
     Total segment
      profit
      (C) - Before
      special items     59           56           58           42         215
     Special items
      (G) (H) (I)        -            -            8          (18)        (10)
     Total segment
      profit            59           56           66           24         205
     Income Applicable
      to Common Shares
     Interest expense  (9)           (9)          (7)          (7)        (33)
     General
      unallocated
      income (expense)
      (D)                -           (2)          (1)           -          (2)
     Less: Equity in
      net income of
      affiliated
      companies        (1)           (2)          (5)          (5)        (13)
     Income from
      Continuing
      Operations
      before income
      taxes             49           43           53           12         157
     Provision for
      income taxes     (17)         (16)          (19)         (5)        (57)
     Equity in net
      income of
      affiliated
      companies          1            2            5            5          13
     Minority
      interest         (2)           (1)          (1)          (1)         (5)
     Income from
      Continuing
      Operations        31           28           38           11         108
     Discontinued
      Operations
     Income from
      Operations of
      Discontinued
      Businesses,
      net of income
      taxes(E)           7           13            8            8          36
     Gain on Sale
      of Business,
      net of income
      taxes (F) (J)      -            -            -          309         309
     Net Income         38           41           46          328         453
     Dividends on
      preferred stock  (1)           (1)          (1)           -          (3)
     Income applicable
      to common shares $37          $40          $45         $328        $450
     Income per common share
     Continuing
      Operations
      Before Special
      Items          $0.41        $0.39        $0.44        $0.31       $1.55
     Discontinued
      Operations (E)  0.09         0.18         0.11         0.11        0.49
     Gain on Sale
      of Business
      (F) (J)            -            -            -         4.24        4.25
     Before Special
      Items           0.50         0.57         0.55         4.66        6.29
     Special Items
      (G) (H) (I)        -            -         0.07        (0.16)       (0.09)
     Total           $0.50        $0.57        $0.62        $4.50       $6.20
     Weighted average
      common shares
      outstanding
     Diluted            73           73           73           73          73
 
 
     In millions, except per share amounts
                                           Fiscal  2001
                   Dec. Q.       Mar. Q.      June Q.     Sept. Q.        FY
 
     Sales
     Chemical
      Businesses      $334         $357                                  $691
     Performance
      Materials         56          103                                  159
     Specialty Fluids    7            5                                   12
     Segment Sales (A) 397          465                                  862
     Unallocated and
      other (B)         (2)          (7)                                   (9)
     Net sales and
      other operating
      revenues        $395         $458                                  $853
     Segment Profit
     Chemical
      Businesses       $41          $35                                   $76
     Performance
      Materials         (3)          26                                    23
     Specialty Fluids    1           (1)                                   -
     Total segment
      profit
      (C) - Before
      special items     39           60                                   99
     Special items
      (G) (H) (I)        -          (17)                                   (17)
     Total segment
      profit            39           43                                    82
     Income Applicable
      to Common Shares
     Interest expense  (8)           (9)                                  (17)
     General
      unallocated
      income
      (expense) (D)     10            6                                    16
     Less: Equity in
      net income of
      affiliated
      companies        (4)           (4)                                   (8)
     Income from
      Continuing
      Operations before
      income taxes      37           36                                    73
     Provision for
      income taxes    (11)          (10)                                  (21)
     Equity in net
      income of
      affiliated
      companies          4            4                                     8
     Minority interest  (2)          (2)                                   (4)
     Income from
      Continuing
      Operations        28           28                                    56
     Discontinued Operations
     Income from
      Operations of
      Discontinued Businesses,
      net of
      income taxes (E)   -            -                                     -
 
     Gain on Sale of
      Business, net
      of income
      taxes (F) (J)      -            3                                     3
     Net Income         28           31                                    59
     Dividends on
      preferred stock  (1)           (1)                                   (2)
     Income applicable
      to common shares $27          $30                                   $57
     Income per common share
     Continuing
      Operations Before
      Special Items  $0.37        $0.52                                 $0.89
     Discontinued
      Operations (E)     -            -                                     -
     Gain on Sale of
      Business (F) (J)   -         0.04                                  0.04
     Before Special
      Items           0.37         0.56                                  0.93
     Special Items
      (G) (H) (I)        -        (0.16)                               (0.16)
     Total           $0.37        $0.40                                 $0.77
     Weighted
      average common
      shares
      outstanding
     Diluted            77           76                                    76
 
 
     (A)  Segment sales for certain operating segments within Chemical
          Businesses include 100% of equity affiliate sales and transfers of
          materials at cost and at market-based prices.
 
     (B)  Unallocated and other reflects an adjustment for equity affiliate
          sales, interoperating segment revenues, royalties paid by equity
          affiliates offset by external shipping and handling costs.
 
     (C)  Segment profit is a measure used by Cabot's chief operating decision-
          makers to measure consolidated operating results and assess segment
          performance.  It includes equity in net income of affiliated
          companies,  royalties paid by equity affiliates, minority interest
          and corporate governance costs, and excludes special items, interest
          expense, gains on the sale of equity securities, foreign currency
          transaction gains (losses), interest income, and dividend income.
 
     (D)  General unallocated income(expense) includes foreign currency
          transaction gains (losses), interest income, dividend income and
          Corporate allocations previously allocated to discontinued segments.
 
 
     (E)  The Liquefied Natural Gas (LNG) and Microelectronics segments are
          presented as Discontinued Operations
 
     (F)  Gain from the sale of the LNG business, net of tax.
 
     (G)  Results for the third quarter of 2000 reflect an $8 million
          settlement of insurance litigation.
 
     (H)  Results for the fourth quarter of 2000 reflect an $18 million charge
          for the closure of two facilities and a $2 million environmental
          charge offset by a $2 million settlement of insurance litigation.
 
     (I)  Results for the second quarter of fiscal 2001 include a charge
          related to the retirement of the Chief Executive Officer.  Included
          in the charge is $10 million relating to the accelerated vesting of
          shares under the Long Term Incentive Compensation Plan and a $7
          million cash payment.
 
     (J)  Results for the second quarter of fiscal 2001 include additional
          proceeds from the sale of the LNG business.
 
                     MAKE YOUR OPINION COUNT -  Click Here
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SOURCE Cabot Corporation
    BOSTON, April 25 /PRNewswire/ -- Cabot Corporation (NYSE:   CBT) today
 announced net income of $40 million from continuing operations, or $0.52 per
 diluted common share before a special charge of $12 million, net of tax, for
 the Company's second fiscal quarter ended March 31, 2001.  In the same quarter
 last year, the Company reported $28 million, or $0.39 per diluted common share
 on a continuing operations basis.  Cabot reported operating profit of $60
 million for the quarter before a special item, compared with $56 million for
 the same quarter of 2000.
     (Photo:  http://www.newscom.com/cgi-bin/prnh/20000323/CABOTLOGO)
     Kennett F. Burnes, Cabot's President and CEO, commented, "In today's
 challenging economy, we are generally pleased with the operating results in
 our businesses.  Our chemical businesses experienced lower volumes,
 particularly in North America.  Like other manufacturing companies, we
 continue to struggle with the effects of a weaker economy.  However, we are
 extremely pleased with the performance of our tantalum business.  Similarly we
 continue to see progress in customer acceptance of our specialty fluids and
 inkjet colorants businesses."
     The chemical businesses reported a $14 million decline in operating profit
 over the same quarter last year.  "Carbon black and fumed metal oxides
 continue to face weakening demand for their traditional products," Burnes
 commented.  The carbon black business experienced a 6% decrease in volumes,
 primarily resulting from lower demand in North America.  The business
 continued its efforts to recover margin with higher prices and lower
 production costs to help offset higher energy costs.  In addition, Carbon
 Black faced higher administrative costs due to corporate initiatives as well
 as an unfavorable currency impact.
     Cabot's Fumed Metal Oxide's business reported a $2 million decrease in
 operating profit for the quarter resulting from weaker volumes in our
 traditional businesses.  This business also faced higher cost of goods,
 including raw materials and energy, as well as an unfavorable currency impact.
     "On a more positive note," Burnes continued, "our tantalum business has
 been able to successfully execute its plans and meet the higher demands of the
 contracts put in place last quarter."  Cabot Performance Materials contributed
 an incremental $18 million in operating profit year over year resulting from
 higher prices and volumes, partially offset by higher costs.  Revenues in the
 business were up 91%, driven by 26% higher average volumes, and 56% higher
 average prices.  Total costs for the business were up 67%, resulting
 principally from greater volumes and higher raw materials costs.  The business
 continues to benefit from strong demand for tantalum powder and wire driven by
 the need for tantalum capacitors from the telecommunications and electronics
 sectors.
     Cabot Specialty Fluids participated in four completion applications, and
 two successful drill-in applications of the Company's cesium brine oilfield
 fluids during the March quarter.  Burnes commented, "The drill-ins have been
 very successful, and have marked another milestone for this business.  Cesium
 formate was used in a situation where conventional products failed, and it
 successfully maintained pressure and integrity of the well.  We are now
 awaiting the results of the productions flow tests."  Cesium formate continues
 to gain market acceptance in high pressure high temperature wells in the North
 Sea, and reported flat operating profit, quarter over quarter.
     Burnes continued, "We are pleased with our financial results given the
 current economic circumstances.  While the chemical businesses will continue
 to struggle with the effects of the overall economic downturn, we are
 confident in our ability to manage those factors that are in our control.  The
 tantalum business delivered results above even our own expectations by
 achieving greater than expected volumes in the second quarter.  We would
 expect these volumes to moderate slightly in the third and fourth quarters.
 We are pleased with the corporate and world-wide initiatives that the Company
 has undertaken, including the share repurchase program, the legal entity
 reorganization which resulted in a lower effective tax rate, and the company-
 wide enterprise resource planning initiative."
     "After fourteen years as Chairman and CEO, Samuel W. Bodman will retire
 from Cabot Corporation in May.  We will miss the leadership and guidance that
 he provided for so many years."
     Cabot Corporation is a global company with operations in chemicals and
 specialty materials.
     Forward Looking Information:  Included above are statements relating to
 management's expectations of future profits, the possible achievement of the
 Company's financial goals and objectives and management's expectations for
 shareholder value creation initiatives and for the Company's product
 development program.  Actual results may differ materially from the results
 anticipated in the statements included herein due to a variety of factors,
 including market supply and demand conditions, fluctuations in currency
 exchange rates, costs of raw materials, patent rights of others, stock market
 conditions, demand for our customers' products and competitors' reactions to
 market conditions.  Timely commercialization of products under development by
 the Company may be disrupted or delayed by technical difficulties, market
 acceptance, competitors' new products, as well as difficulties in moving from
 the experimental stage to the production stage.
 
 
     Second Quarter Earnings Announcement, Fiscal 2001
 
     CABOT CORPORATION SUMMARY RESULTS BY SEGMENTS
 
                                                Three Months      Six Months
     Periods ended March 31
     In millions, except per share amounts
      (unaudited)                              2001     2000     2001     2000
 
     SALES
 
     Chemical Businesses                       $357     $339     $691     $669
     Performance Materials                      103       54      159      105
     Specialty Fluids                             5        6       12       10
        Segment sales (A)                       465      399      862      784
     Unallocated and other (B)                   (7)      (2)      (9)     (10)
        Net sales and other operating
         revenues                              $458     $397     $853     $774
 
     SEGMENT PROFIT
 
     Chemical Businesses                        $35      $49      $76     $102
     Performance Materials                       26        8       23       16
     Specialty Fluids                            (1)      (1)       -       (3)
        Total segment profit (C) - Before
         special items                           60       56       99      115
     Special Items(G)                           (17)       -      (17)       -
        Total segment profit                     43       56       82      115
 
     INCOME APPLICABLE TO COMMON SHARES
 
     Interest expense                            (9)      (9)     (17)     (18)
     General unallocated
      income (expense)(D)                         6       (2)      16       (2)
     Less: Equity in net income of
      affiliated companies                       (4)      (2)      (8)      (3)
     Income from continuing operations
      before income taxes                        36       43       73       92
     Provision for income taxes                 (10)     (16)     (21)     (33)
     Equity in net income of affiliated
      companies                                   4        2        8        3
     Minority interest                           (2)      (1)      (4)      (3)
     Income from Continuing Operations           28       28       56       59
     Discontinued Operations
        Income from Operations of
         Discontinued Businesses,
         net of income taxes (E)                  -       13        -       20
        Gain on Sale of Business, net of
         income taxes(F)                          3        -        3        -
        Net income                               31       41       59       79
     Dividends on preferred stock                (1)      (1)      (2)      (2)
       Income applicable to common shares       $30      $40      $57      $77
 
     DILUTED EARNINGS PER SHARE OF COMMON STOCK
 
        Continuing Operations Before
         Special Items                        $0.52    $0.39    $0.89    $0.80
        Discontinued Operations(E)              -       0.18      -       0.27
        Gain on Sale of Business(F)            0.04      -       0.04      -
        Before Special Items                   0.56     0.57     0.93     1.07
        Special Items(G)                      (0.16)     -      (0.16)     -
        Net Income                            $0.40    $0.57    $0.77    $1.07
 
     WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
 
        Diluted                                  76       73       76       73
 
     (A) Segment sales for certain operating segments within Chemical
         Businesses include 100% of equity affiliate sales and transfers of
         materials at cost and at market-based prices.
 
     (B) Unallocated and other reflects an adjustment for equity affiliate
         sales and interoperating segment revenues and includes royalties paid
         by equity affiliates offset by external shipping and handling costs.
 
     (C) Segment profit is a measure used by Cabot's chief operating decision-
         makers to measure consolidated operating results and assess segment
         performance.  It includes equity in net income of affiliated
         companies, royalties paid by equity affiliates, minority interest and
         corporate governance costs, and excludes interest expense, foreign
         currency transaction gains (losses), interest income and dividend
         income.
 
     (D) General unallocated income (expense) includes foreign currency
         transaction gains (losses), interest income, dividend income and
         corporate allocations previously allocated to discontinued segments.
 
     (E) The Liquefied Natural Gas (LNG) and Microelectronics businesses are
         presented as discontinued operations.
 
     (F) Additional proceeds from the sale of the LNG business, net of tax.
 
     (G) Results for the second quarter of fiscal 2001 include a charge related
         to the retirement of the Chief Executive Officer.  Included in the
         charge is $10 million relating to the accelerated vesting of shares
         issued under the Long Term Incentive Compensation Plan and a $7
         million cash payment.
 
 
     Second Quarter Earnings Announcement, Fiscal 2001
 
     CABOT CORPORATION CONSOLIDATED STATEMENTS OF INCOME
 
     Periods ended March 31                  Three Months       Six Months
     Dollars in millions, except per
      share amounts (unaudited)              2001    2000(A)   2001    2000(A)
 
     REVENUES
 
         Net sales and other operating
          revenues                           $458     $397     $853     $774
         Interest and dividend income           7        1       18        2
            Total revenues                   $465     $398     $871     $776
 
     COSTS AND EXPENSES
 
         Cost of sales                       $339     $291     $644     $559
         Selling and administrative
          expenses                             52       44       97       85
         Research and technical expenses       12       11       23       21
         Interest expense                       9        9       17       18
         Special items (B)                     17        -       17        -
         Other charges, net                     -        -        -        1
            Total costs and expenses         $429     $355     $798     $684
     Income from continuing operations
      before income taxes                     $36      $43      $73      $92
     Provision for income taxes               (10)     (16)     (21)     (33)
     Equity in net income of affiliated
      companies                                 4        2        8        3
     Minority Interest                         (2)      (1)      (4)      (3)
     Income from Continuing Operations         28       28       56       59
     Discontinued Operations
         Income from Operations of
          Discontinued Businesses,
             net of income taxes (C)            -       13        -       20
         Gain on Sale of Business, net of
          income taxes (D)                      3        -        3        -
         Net Income                            31       41       59       79
     Dividends on preferred stock              (1)      (1)      (2)      (2)
         Income applicable to common
          shares                              $30      $40      $57      $77
 
     DILUTED EARNINGS PER SHARE OF COMMON
      STOCK
 
         Continuing Operations Before
          Special Items                     $0.52    $0.39    $0.89    $0.80
         Discontinued Operations(C)           -       0.18      -       0.27
         Gain on Sale of Business(D)         0.04      -       0.04      -
         Before Special Items                0.56     0.57     0.93     1.07
         Special Items(B)                   (0.16)     -      (0.16)     -
         Net Income                         $0.40    $0.57    $0.77    $1.07
 
     WEIGHTED AVERAGE COMMON SHARES
      OUTSTANDING
 
         Diluted                               76       73       76       73
 
 
 
     (A) Certain amounts in 2000 have been reclassified to conform to the 2001
         presentation.
 
     (B) Results for the second quarter of fiscal 2001 include a charge related
         to the retirement of the Chief Executive Officer.  Included in the
         charge is $10 million relating to the accelerated vesting of shares
         issued under the Long Term Incentive Compensation Plan and a $7
         million cash payment.
 
     (C) The Liquefied Natural Gas (LNG) and Microelectronics businesses are
         presented as discontinued operations.
 
     (D) Additional proceeds from the sale of the Liquefied Natural Gas
         business, net of tax.
 
 
     Second Quarter Earnings Announcement, Fiscal 2001
 
     CABOT CORPORATION CONDENSED CONSOLIDATED FINANCIAL POSITION
 
                                                  March 31,           Sept. 30,
     In millions, (unaudited)                       2001                2000
 
     Current assets                                $1,081              $1,190
     Net property, plant and equipment                773                 806
     Other non-current assets                         155                 138
               Total assets                        $2,009              $2,134
 
 
     Current liabilities                             $276                $494
     Non-current liabilities                          712                 593
     Stockholders' equity                           1,021               1,047
               Total liabilities and
                stockholders' equity               $2,009              $2,134
 
     Working capital                                 $805                $696
 
 
     CABOT CORPORATION
 
     In millions, except per share amounts
 
                                            Fiscal 2000
                   Dec. Q.       Mar. Q.      June Q.     Sept. Q.       FY
 
     Sales
     Chemical
      Businesses      $330         $339         $357         $334      $1,360
     Performance
      Materials         51           54           56           54         215
     Specialty
      Fluids             4            6            6            4          20
     Segment
      Sales (A)        385          399          419          392        1595
     Unallocated
      and other (B)    (8)           (2)          (5)          (5)        (21)
     Net sales and
      other operating
      revenues        $377         $397         $414         $387      $1,574
     Segment Profit
     Chemical
      Businesses       $53          $49          $48          $30        $180
     Performance
      Materials          8            8           10           12          38
     Specialty Fluids  (2)           (1)           -            -          (3)
     Total segment
      profit
      (C) - Before
      special items     59           56           58           42         215
     Special items
      (G) (H) (I)        -            -            8          (18)        (10)
     Total segment
      profit            59           56           66           24         205
     Income Applicable
      to Common Shares
     Interest expense  (9)           (9)          (7)          (7)        (33)
     General
      unallocated
      income (expense)
      (D)                -           (2)          (1)           -          (2)
     Less: Equity in
      net income of
      affiliated
      companies        (1)           (2)          (5)          (5)        (13)
     Income from
      Continuing
      Operations
      before income
      taxes             49           43           53           12         157
     Provision for
      income taxes     (17)         (16)          (19)         (5)        (57)
     Equity in net
      income of
      affiliated
      companies          1            2            5            5          13
     Minority
      interest         (2)           (1)          (1)          (1)         (5)
     Income from
      Continuing
      Operations        31           28           38           11         108
     Discontinued
      Operations
     Income from
      Operations of
      Discontinued
      Businesses,
      net of income
      taxes(E)           7           13            8            8          36
     Gain on Sale
      of Business,
      net of income
      taxes (F) (J)      -            -            -          309         309
     Net Income         38           41           46          328         453
     Dividends on
      preferred stock  (1)           (1)          (1)           -          (3)
     Income applicable
      to common shares $37          $40          $45         $328        $450
     Income per common share
     Continuing
      Operations
      Before Special
      Items          $0.41        $0.39        $0.44        $0.31       $1.55
     Discontinued
      Operations (E)  0.09         0.18         0.11         0.11        0.49
     Gain on Sale
      of Business
      (F) (J)            -            -            -         4.24        4.25
     Before Special
      Items           0.50         0.57         0.55         4.66        6.29
     Special Items
      (G) (H) (I)        -            -         0.07        (0.16)       (0.09)
     Total           $0.50        $0.57        $0.62        $4.50       $6.20
     Weighted average
      common shares
      outstanding
     Diluted            73           73           73           73          73
 
 
     In millions, except per share amounts
                                           Fiscal  2001
                   Dec. Q.       Mar. Q.      June Q.     Sept. Q.        FY
 
     Sales
     Chemical
      Businesses      $334         $357                                  $691
     Performance
      Materials         56          103                                  159
     Specialty Fluids    7            5                                   12
     Segment Sales (A) 397          465                                  862
     Unallocated and
      other (B)         (2)          (7)                                   (9)
     Net sales and
      other operating
      revenues        $395         $458                                  $853
     Segment Profit
     Chemical
      Businesses       $41          $35                                   $76
     Performance
      Materials         (3)          26                                    23
     Specialty Fluids    1           (1)                                   -
     Total segment
      profit
      (C) - Before
      special items     39           60                                   99
     Special items
      (G) (H) (I)        -          (17)                                   (17)
     Total segment
      profit            39           43                                    82
     Income Applicable
      to Common Shares
     Interest expense  (8)           (9)                                  (17)
     General
      unallocated
      income
      (expense) (D)     10            6                                    16
     Less: Equity in
      net income of
      affiliated
      companies        (4)           (4)                                   (8)
     Income from
      Continuing
      Operations before
      income taxes      37           36                                    73
     Provision for
      income taxes    (11)          (10)                                  (21)
     Equity in net
      income of
      affiliated
      companies          4            4                                     8
     Minority interest  (2)          (2)                                   (4)
     Income from
      Continuing
      Operations        28           28                                    56
     Discontinued Operations
     Income from
      Operations of
      Discontinued Businesses,
      net of
      income taxes (E)   -            -                                     -
 
     Gain on Sale of
      Business, net
      of income
      taxes (F) (J)      -            3                                     3
     Net Income         28           31                                    59
     Dividends on
      preferred stock  (1)           (1)                                   (2)
     Income applicable
      to common shares $27          $30                                   $57
     Income per common share
     Continuing
      Operations Before
      Special Items  $0.37        $0.52                                 $0.89
     Discontinued
      Operations (E)     -            -                                     -
     Gain on Sale of
      Business (F) (J)   -         0.04                                  0.04
     Before Special
      Items           0.37         0.56                                  0.93
     Special Items
      (G) (H) (I)        -        (0.16)                               (0.16)
     Total           $0.37        $0.40                                 $0.77
     Weighted
      average common
      shares
      outstanding
     Diluted            77           76                                    76
 
 
     (A)  Segment sales for certain operating segments within Chemical
          Businesses include 100% of equity affiliate sales and transfers of
          materials at cost and at market-based prices.
 
     (B)  Unallocated and other reflects an adjustment for equity affiliate
          sales, interoperating segment revenues, royalties paid by equity
          affiliates offset by external shipping and handling costs.
 
     (C)  Segment profit is a measure used by Cabot's chief operating decision-
          makers to measure consolidated operating results and assess segment
          performance.  It includes equity in net income of affiliated
          companies,  royalties paid by equity affiliates, minority interest
          and corporate governance costs, and excludes special items, interest
          expense, gains on the sale of equity securities, foreign currency
          transaction gains (losses), interest income, and dividend income.
 
     (D)  General unallocated income(expense) includes foreign currency
          transaction gains (losses), interest income, dividend income and
          Corporate allocations previously allocated to discontinued segments.
 
 
     (E)  The Liquefied Natural Gas (LNG) and Microelectronics segments are
          presented as Discontinued Operations
 
     (F)  Gain from the sale of the LNG business, net of tax.
 
     (G)  Results for the third quarter of 2000 reflect an $8 million
          settlement of insurance litigation.
 
     (H)  Results for the fourth quarter of 2000 reflect an $18 million charge
          for the closure of two facilities and a $2 million environmental
          charge offset by a $2 million settlement of insurance litigation.
 
     (I)  Results for the second quarter of fiscal 2001 include a charge
          related to the retirement of the Chief Executive Officer.  Included
          in the charge is $10 million relating to the accelerated vesting of
          shares under the Long Term Incentive Compensation Plan and a $7
          million cash payment.
 
     (J)  Results for the second quarter of fiscal 2001 include additional
          proceeds from the sale of the LNG business.
 
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 SOURCE  Cabot Corporation