WestRock Company (WRK Quick QuoteWRK - Free Report) is set to report second-quarter fiscal 2018 results on Apr 27, before the opening bell. In the last reported quarter, the company delivered year-over-year improvement in both its top and bottom lines. While revenues missed the Zacks Consensus Estimate, earnings beat the same. The company has an impressive earnings surprise history, surpassing the Zacks Consensus Estimate in the trailing four quarters, with an average beat of 13.48%.

 

 

 

Zacks ESP: WestRock has an Earnings ESP of +2.32% as the Most Accurate estimate is pegged at 85 cents, higher than the Zacks Consensus Estimate of 83 cents. A positive ESP indicates a likely earnings surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

 

Zacks Rank: WestRock carries a Zacks Rank #1. This when combined with a positive ESP, makes us reasonably confident of an earnings beat.

 

Conversely, we caution against Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

 

 

Per the Zacks Consensus Estimates, WestRock will witness sales growth in its major segments — Consumer Packaging and Corrugated Packaging. The Consumer Packaging’s revenues are projected to grow 17% to $1,821 million. The Corrugated Packaging segment’s revenues are anticipated to rise 9% year over year to $2,260 million. The Land & Development segment is expected to report revenues of $79 million, down 21% year over year.

 

The Zacks Consensus Estimate for total revenues is pegged at $4.06 billion, projecting year-over-year growth of 11%.

 

The Corrugated Packaging segment’s operating profit is anticipated to grow 53% to $244 million.  However, the Consumer Packaging segment’s operating profit is expected to dip 11% year over year to $106 million. The Land & Development segment is projected to report operating profit of $2.1 million, a substantial drop from $17.6 million reported in the prior-year quarter.

 

During second-quarter fiscal 2018, the company apprehends moderate inflation in OCC (Old Corrugated Containers) prices. Further, transportation costs are being negatively impacted by winter weather, higher diesel costs and truck and rail shortages driven by strong economic conditions. The winter weather is also pushing virgin fiber costs higher. Overall, commodity inflation is projected at around $40-$45 million pre-tax for the quarter. Moreover, the winter weather may have an additional $15-$20 million sequential impact.

 

Despite these headwinds, for the fiscal second quarter, WestRock expects adjusted earnings per share to be higher than the 54 cents per share achieved in the prior-year quarter driven by overall industry conditions along with positive volume and pricing dynamics. The Zacks Consensus Estimate for earnings is pegged at 83 cents for the quarter, a 53.7% year-over-year growth.

 

 

 

Over the past year, shares of WestRock have outperformed the industry. The stock gained 23% ahead of the industry’s rise of 22%.

 

 

Here are some stocks you may want to consider, as according to our model these too have the right combination of elements to post an earnings beat this quarter.

 

Allegheny Technologies Incorporated (ATI Quick QuoteATI - Free Report) has an Earnings ESP of +5.63% and a Zacks Rank #1. Its shares have gone up 43% in a year’s time.

 

The Chemours Company (CC Quick QuoteCC - Free Report) has an Earnings ESP of +2.71% and a Zacks Rank #2 (Buy). Its shares have gained 33% over the past year.

 

Methanex Corporation (MEOH Quick QuoteMEOH - Free Report) has an Earnings ESP of +4.58% and a Zacks Rank #2. Its shares have gone up 46% in a year’s time.

 

 

Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.

 

With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research. It's not the one you think.