Veritiv Corporation reported earnings per share of $1.62 in second-quarter 2021, marking a turnaround from the loss per share of $1.16 seen in the year-ago period. This upside was driven by continued Packaging sales growth and operational efficiencies. Also, the bottom line beat the Zacks Consensus Estimate of 81 cents by a wide margin.
Veritiv’s total revenues increased 18.1% year over year to $1,659 million.
Cost of sales was up 19.2% year on year to $1,319 million during the reported quarter. Gross profit improved 14% year over year to $339.6 million. Gross margin was 20.4% in the second quarter compared with the prior-year quarter’s 21.2%.
Adjusted EBITDA was a record $73.5 million, reflecting an 84.7% improvement from the $39.8 million reported in the year-earlier period. Adjusted EBITDA margin expanded to 4.4% compared with the prior-year quarter’s 2.8%.
Financial Position
Veritiv had cash and cash equivalents of $34.7 million as of Jun 30, 2021, down from $121 million held as on Dec 31, 2021. Long-term debt was at $520.4 million as of Jun 30, 2021, down from $589.1 million as of Dec 31, 2020. The company ended the quarter with a record low net leverage ratio of 1.7x.
Net cash provided by operating activities for the first half of 2021 was $50.1 million compared with the prior-year period’s $226.5 million. Veritiv repurchased approximately $50 million of its shares in the first half of 2021 as part of its previously-authorized share-repurchase program. During the second quarter, Veritiv expanded its share-repurchase program to $100 million.
2021 Guidance
Backed by the impressive first-half 2021 performance, Veritiv raised its guidance for 2021. The company now expects net income for 2021 in the range of $100 million to $120 million, up from prior guidance of $95 to $115 million. Earnings per share are expected in the band of $6.25-$7.50 for the year. Veritiv expects adjusted EBITDA in the range of $270 million to $290 million, up from the prior estimate of $220-$240 million.
Free cash flow for 2021 is expected to be at least $110 million with capital expenditures at around $35 million.
Price Performance
Shares of Veritiv have soared 270.1%, so far this year, compared with the industry’s growth of 14.4%.
Zacks Rank & Stocks to Consider
Veritiv currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the basic materials space include Nucor Corporation (NUE - Free Report) , Cabot Corporation (CBT - Free Report) and Dow Inc. (DOW - Free Report) .
Nucor has a projected earnings growth rate of 455% for 2021. The company’s shares have soared 97.9% so far this year. It currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Cabot has an expected earnings growth rate of 137% for the current fiscal year. The company’s shares have gained 21.8% so far this year. It currently sports a Zacks Rank #1.
Dow has an estimated earnings growth rate of 403% for the current year. So far this year, the company’s shares have gained 14.1%. It currently carries a Zacks Rank #2 (Buy).
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Veritiv Corporation reported earnings per share of $1.62 in second-quarter 2021, marking a turnaround from the loss per share of $1.16 seen in the year-ago period. This upside was driven by continued Packaging sales growth and operational efficiencies. Also, the bottom line beat the Zacks Consensus Estimate of 81 cents by a wide margin.
Veritiv’s total revenues increased 18.1% year over year to $1,659 million.
Cost of sales was up 19.2% year on year to $1,319 million during the reported quarter. Gross profit improved 14% year over year to $339.6 million. Gross margin was 20.4% in the second quarter compared with the prior-year quarter’s 21.2%.
Adjusted EBITDA was a record $73.5 million, reflecting an 84.7% improvement from the $39.8 million reported in the year-earlier period. Adjusted EBITDA margin expanded to 4.4% compared with the prior-year quarter’s 2.8%.
Financial Position
Veritiv had cash and cash equivalents of $34.7 million as of Jun 30, 2021, down from $121 million held as on Dec 31, 2021. Long-term debt was at $520.4 million as of Jun 30, 2021, down from $589.1 million as of Dec 31, 2020. The company ended the quarter with a record low net leverage ratio of 1.7x.
Net cash provided by operating activities for the first half of 2021 was $50.1 million compared with the prior-year period’s $226.5 million. Veritiv repurchased approximately $50 million of its shares in the first half of 2021 as part of its previously-authorized share-repurchase program. During the second quarter, Veritiv expanded its share-repurchase program to $100 million.
2021 Guidance
Backed by the impressive first-half 2021 performance, Veritiv raised its guidance for 2021. The company now expects net income for 2021 in the range of $100 million to $120 million, up from prior guidance of $95 to $115 million. Earnings per share are expected in the band of $6.25-$7.50 for the year. Veritiv expects adjusted EBITDA in the range of $270 million to $290 million, up from the prior estimate of $220-$240 million.
Free cash flow for 2021 is expected to be at least $110 million with capital expenditures at around $35 million.
Price Performance
Shares of Veritiv have soared 270.1%, so far this year, compared with the industry’s growth of 14.4%.
Zacks Rank & Stocks to Consider
Veritiv currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the basic materials space include Nucor Corporation (NUE - Free Report) , Cabot Corporation (CBT - Free Report) and Dow Inc. (DOW - Free Report) .
Nucor has a projected earnings growth rate of 455% for 2021. The company’s shares have soared 97.9% so far this year. It currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Cabot has an expected earnings growth rate of 137% for the current fiscal year. The company’s shares have gained 21.8% so far this year. It currently sports a Zacks Rank #1.
Dow has an estimated earnings growth rate of 403% for the current year. So far this year, the company’s shares have gained 14.1%. It currently carries a Zacks Rank #2 (Buy).
Free Report – The Bitcoin Profit Phenomenon
Zacks Investment Research has released a Special Report to help you pursue massive profits from the world’s first and largest decentralized form of money.
No guarantees for the future, but in the past three presidential election years, Bitcoin’s returns were as follows: 2012 +272.4%, 2016 +161.1%, and 2020 +302.8%.
Zacks predicts another significant surge. Click below for Bitcoin: A Tumultuous Yet Resilient History.
Download Now – Today It’s FREE >>
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