WestRock Company (WRK - Free Report) reported adjusted earnings of 89 cents per share in third-quarter fiscal 2023, lagging the Zacks Consensus Estimate of earnings of 50 cents per share. The bottom line declined 42% year over year due to lower volumes, economic downtime, maintenance outages, higher interest expenses and business systems transformation costs. However, higher selling price/mix, increased cost savings, contribution from the Mexico Acquisition and easing in cost inflation negated part of this impact on earnings.
Including one-time items, the company reported earnings of 79 cents per share compared with the $1.54 per share posted in the prior-year quarter.
WestRock’s total revenues declined 7% year over year to $5,121 billion. The top-line figure lagged the Zacks Consensus Estimate of $5,233 billion. Overall, sales were mainly dragged down by slump in the Global Paper segment’s sales.
The cost of sales was down 6% year over year to around $4,100 million in the fiscal third quarter. The gross profit declined 12% year over year to $1,022 million. The consolidated adjusted segment EBITDA was $802 million, down 20% from the year-earlier quarter.
Segment Performances
Sales in the Corrugated Packaging segment were up 7.7% year over year to $2,566 million during the quarter under review. The segment’s reported revenues lagged the Zacks Consensus Estimate of $2,597 million. The adjusted segment EBITDA increased 12% year over year to $430 million.
The Consumer Packaging segment reported sales of $1,251 million, down 1.5% year over year. The figure came higher than the consensus estimate of $1,211 million. The adjusted segment EBITDA dipped 2.1% year over year to $230 million.
Sales in the Paper segment slumped 34% year over year to $1,066 million. The revenue estimate for the Paper segment was $1,130 million. The adjusted segment EBITDA fell 56% year over year to $177 million.
The Distribution segment’s sales declined 11.2% year over year to $318 million. The Zacks Consensus Estimate for the Distribution segment’s revenues was $341 million. The segment’s adjusted EBITDA dropped 69% year over year to $6 million.
Financial Position
WestRock had cash and cash equivalents of $315 million as of the end of the third quarter of 2023, compared with $260 million as of the end of fiscal 2022. The company reported total debt of $9 billion as of the end of the quarter under review, up from $7.6 billion at the end of fiscal 2022.
Net cash provided by operating activities in the first quarter of fiscal 2023 was $694 million, compared with $837 million in the prior-year quarter. In the reported quarter, WestRock paid out $71 million as dividends and invested $255 million in capital expenditure.
Price Performance
Shares of WestRock have fallen 22.6% in the past year compared with the industry’s 8.3% decline.
Zacks Rank & Stocks to Consider
WestRock currently carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the basic materials space are Carpenter Technology Corporation (CRS - Free Report) , PPG Industries Inc. (PPG - Free Report) and ATI Inc. (ATI - Free Report) . While CRS currently sports a Zacks Rank #1 (Strong Buy), PPG & ATI carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Carpenter Technology has a projected earnings growth rate of 198.11% for the current year. Its earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 30.9%, on average. CRS shares are up around 76.6% in a year.
PPG has an expected earnings growth rate of 20.8% for the current fiscal year. The Zacks Consensus Estimate for PPG's earnings for the current fiscal year has been revised 1.6% upward in the past 60 days. It delivered an earnings surprise of 7.3% each of the trailing four quarters, on average. PPG has gained around 10.5% over a year.
AT has a projected earnings growth rate of 13.1% for the current year. Its earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 13%, on average. ATI shares are up around 77.8% in a year.
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WestRock Company (WRK - Free Report) reported adjusted earnings of 89 cents per share in third-quarter fiscal 2023, lagging the Zacks Consensus Estimate of earnings of 50 cents per share. The bottom line declined 42% year over year due to lower volumes, economic downtime, maintenance outages, higher interest expenses and business systems transformation costs. However, higher selling price/mix, increased cost savings, contribution from the Mexico Acquisition and easing in cost inflation negated part of this impact on earnings.
Including one-time items, the company reported earnings of 79 cents per share compared with the $1.54 per share posted in the prior-year quarter.
WestRock’s total revenues declined 7% year over year to $5,121 billion. The top-line figure lagged the Zacks Consensus Estimate of $5,233 billion. Overall, sales were mainly dragged down by slump in the Global Paper segment’s sales.
The cost of sales was down 6% year over year to around $4,100 million in the fiscal third quarter. The gross profit declined 12% year over year to $1,022 million. The consolidated adjusted segment EBITDA was $802 million, down 20% from the year-earlier quarter.
Segment Performances
Sales in the Corrugated Packaging segment were up 7.7% year over year to $2,566 million during the quarter under review. The segment’s reported revenues lagged the Zacks Consensus Estimate of $2,597 million. The adjusted segment EBITDA increased 12% year over year to $430 million.
The Consumer Packaging segment reported sales of $1,251 million, down 1.5% year over year. The figure came higher than the consensus estimate of $1,211 million. The adjusted segment EBITDA dipped 2.1% year over year to $230 million.
Sales in the Paper segment slumped 34% year over year to $1,066 million. The revenue estimate for the Paper segment was $1,130 million. The adjusted segment EBITDA fell 56% year over year to $177 million.
The Distribution segment’s sales declined 11.2% year over year to $318 million. The Zacks Consensus Estimate for the Distribution segment’s revenues was $341 million. The segment’s adjusted EBITDA dropped 69% year over year to $6 million.
Financial Position
WestRock had cash and cash equivalents of $315 million as of the end of the third quarter of 2023, compared with $260 million as of the end of fiscal 2022. The company reported total debt of $9 billion as of the end of the quarter under review, up from $7.6 billion at the end of fiscal 2022.
Net cash provided by operating activities in the first quarter of fiscal 2023 was $694 million, compared with $837 million in the prior-year quarter. In the reported quarter, WestRock paid out $71 million as dividends and invested $255 million in capital expenditure.
Price Performance
Shares of WestRock have fallen 22.6% in the past year compared with the industry’s 8.3% decline.
Zacks Rank & Stocks to Consider
WestRock currently carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the basic materials space are Carpenter Technology Corporation (CRS - Free Report) , PPG Industries Inc. (PPG - Free Report) and ATI Inc. (ATI - Free Report) . While CRS currently sports a Zacks Rank #1 (Strong Buy), PPG & ATI carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Carpenter Technology has a projected earnings growth rate of 198.11% for the current year. Its earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 30.9%, on average. CRS shares are up around 76.6% in a year.
PPG has an expected earnings growth rate of 20.8% for the current fiscal year. The Zacks Consensus Estimate for PPG's earnings for the current fiscal year has been revised 1.6% upward in the past 60 days. It delivered an earnings surprise of 7.3% each of the trailing four quarters, on average. PPG has gained around 10.5% over a year.
AT has a projected earnings growth rate of 13.1% for the current year. Its earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 13%, on average. ATI shares are up around 77.8% in a year.
Zacks Names #1 Semiconductor Stock
It's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.
With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.
See This Stock Now for Free >>
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