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WestRock (WRK) Up 13.4% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for WestRock (WRK - Free Report) . Shares have added about 13.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is WestRock due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
WestRock Earnings & Revenues Top Estimates in Q4
WestRock delivered fourth-quarter fiscal 2020 (ended Sep 30, 2020) loss per share of $4.45, as against the earnings per share of $1.20 recorded in the prior-year quarter.
Barring one-time items, adjusted earnings came in at 73 cents per share, surpassing the Zacks Consensus Estimate of 68 cents.
Operational Update
WestRock’s total revenues slid 3.8% year over year to $4,472 million. However, the revenue figure beat the Zacks Consensus Estimate of $4,314 million.
Cost of sales was up 2.3% year over year to $3,658 million during the fiscal fourth quarter. Gross profit declined 24.6% year over year to $813 million. Gross margin came in at 18.2% compared with the 23.2% reported in the prior-year period. Adjusted segment EBITDA was $721 million compared with the $891 million witnessed in the year-earlier quarter. Total segment income was around $373 million, down from the year-ago quarter’s $585 million.
Segmental Performance
Corrugated Packaging: Sales in the segment dropped 4% year over year to $2,898 million in the September-end quarter primarily on lower corrugated selling price/mix, lower volumes, and unfavorable impact of the coronavirus pandemic and foreign currency. Adjusted segment EBITDA decreased 19.8% year over year to $513 million.
Consumer Packaging: Sales in the segment slid 2.5% year on year to $1,627 million. This downside resulted from lower selling price/mix, dismal volumes, and unfavorable impact of the pandemic. Adjusted segment EBITDA declined 17% year over year to $223 million.
Fiscal 2020 Performance
Including one-time items, the company reported a loss of $2.67 per share in fiscal 2020 as against the earnings per share of $3.33 recorded in the prior fiscal year. WestRock’s total revenues were down 3.8% year over year to $17.6 billion.
Financial Position
As of fiscal 2020 end, cash and cash equivalents were $251 million, significantly up from the $152 million witnessed at the end of fiscal 2019. Total debt was $9.4 billion at the end of fiscal 2020 compared with the $10.2 billion recorded at the end of fiscal 2019. Cash flow from operations was $2,071 million in fiscal 2020 compared with the prior fiscal’s $2,310 million. In fiscal 2020, WestRock invested $978 million in capital expenditure and paid out $345 million in dividends.
The company is focused on meeting the rising demand for sustainable, fiber-based packaging solutions, and executing strategies for boosting financial strength and liquidity to counter the pandemic-related setbacks.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month. The consensus estimate has shifted 40% due to these changes.
VGM Scores
Currently, WestRock has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. Following the exact same course, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. Notably, WestRock has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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WestRock (WRK) Up 13.4% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for WestRock (WRK - Free Report) . Shares have added about 13.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is WestRock due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
WestRock Earnings & Revenues Top Estimates in Q4
WestRock delivered fourth-quarter fiscal 2020 (ended Sep 30, 2020) loss per share of $4.45, as against the earnings per share of $1.20 recorded in the prior-year quarter.
Barring one-time items, adjusted earnings came in at 73 cents per share, surpassing the Zacks Consensus Estimate of 68 cents.
Operational Update
WestRock’s total revenues slid 3.8% year over year to $4,472 million. However, the revenue figure beat the Zacks Consensus Estimate of $4,314 million.
Cost of sales was up 2.3% year over year to $3,658 million during the fiscal fourth quarter. Gross profit declined 24.6% year over year to $813 million. Gross margin came in at 18.2% compared with the 23.2% reported in the prior-year period. Adjusted segment EBITDA was $721 million compared with the $891 million witnessed in the year-earlier quarter. Total segment income was around $373 million, down from the year-ago quarter’s $585 million.
Segmental Performance
Corrugated Packaging: Sales in the segment dropped 4% year over year to $2,898 million in the September-end quarter primarily on lower corrugated selling price/mix, lower volumes, and unfavorable impact of the coronavirus pandemic and foreign currency. Adjusted segment EBITDA decreased 19.8% year over year to $513 million.
Consumer Packaging: Sales in the segment slid 2.5% year on year to $1,627 million. This downside resulted from lower selling price/mix, dismal volumes, and unfavorable impact of the pandemic. Adjusted segment EBITDA declined 17% year over year to $223 million.
Fiscal 2020 Performance
Including one-time items, the company reported a loss of $2.67 per share in fiscal 2020 as against the earnings per share of $3.33 recorded in the prior fiscal year. WestRock’s total revenues were down 3.8% year over year to $17.6 billion.
Financial Position
As of fiscal 2020 end, cash and cash equivalents were $251 million, significantly up from the $152 million witnessed at the end of fiscal 2019. Total debt was $9.4 billion at the end of fiscal 2020 compared with the $10.2 billion recorded at the end of fiscal 2019. Cash flow from operations was $2,071 million in fiscal 2020 compared with the prior fiscal’s $2,310 million. In fiscal 2020, WestRock invested $978 million in capital expenditure and paid out $345 million in dividends.
The company is focused on meeting the rising demand for sustainable, fiber-based packaging solutions, and executing strategies for boosting financial strength and liquidity to counter the pandemic-related setbacks.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month. The consensus estimate has shifted 40% due to these changes.
VGM Scores
Currently, WestRock has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. Following the exact same course, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. Notably, WestRock has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.