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What's in the Offing for WestRock's (WRK) Q3 Earnings?
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WestRock Company (WRK - Free Report) is scheduled to report third-quarter fiscal 2021 results (ended as of Jun 30, 2021) on Aug 5, before the bell.
Q3 Estimates
The Zacks Consensus Estimate for fiscal third-quarter revenues is pegged at $4.6 billion, suggesting growth of 9.01% from the year-ago period. The same for earnings per share stands at 97 cents, indicating a year-over-year drop increase of 27.6%. The Zacks Consensus Estimate for the company’s fiscal third-quarter earnings moved north over the past 30 days.
Q2 Performance
WestRock’s adjusted earnings per share and revenues both missed the Zacks Consensus Estimate in the prior quarter and declined year over year as well. The company has a trailing four-quarter average earnings surprise of 20.04%.
Key Factors to Note
Packaging products are essential for the distribution of food, beverage and pharmaceutical products. Further, the pandemic-induced stay-at-home orders and restrictions worldwide have fueled demand for online grocery, beverage and pharmaceuticals delivery services, which, in turn, is driving e-commerce growth. Consequently, the company’s Consumer Packaging segment is anticipated to have benefited from elevated demand for the packaging of food, beverages, household cleaning and liquid packaging during the fiscal third quarter.
However, waning demand across few of WestRock’s businesses due to the coronavirus crisis might have weighed on the company’s performance. Demand in food service has been impacted by uncertainty in timing of reopening of restaurants, schools and other services. Commercial print demand has also been strained due to limited public events, and reduced retail and direct mail advertising. Luxury goods have also been hit hard. These factors are expected to have dented the company’s fiscal third-quarter performance. Also, maintenance downtime across the North American Corrugated Packaging and Consumer Packaging segment as well as escalating recycled fiber, chemical, and transportation costs might have unfavorably impacted the company during the fiscal third quarter.
WestRock acquired KapStone Paper and Packaging Corp in 2019, with the integration on track. The buyout has helped the company cement its presence in the Western United States. Further, the company continues to boost its North American corrugated packaging business margins. These moves are likely to have contributed to its performance during the quarter in review. In addition, productivity, performance-improvement programs across its manufacturing footprint and cost savings are anticipated to have aided the company’s performance during the quarter under review.
The Zacks Consensus Estimate for the Consumer Packaging segment’s quarterly revenues is pegged at $1,631 million, suggesting growth of 5% from the prior-year period. The segment’s adjusted EBITDA is estimated to have been up 5.7%, year over year, to $257 million.
For the Corrugated Packaging segment revenues, the Zacks Consensus Estimate is pinned at $3,031 million, calling for growth of 11% from year-ago quarter. Improved box shipment and increased demand from distribution, industrial and agricultural customers are likely to have aided the segment. The segment’s adjusted EBITDA is anticipated to have been up 15.5%, year over year, to $557 million.
Our proven model predicts an earnings beat for WestRock this time around. The combination of a positive Earnings ESP, and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), increases the odds of an earnings beat but that is not the case here.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: The Earnings ESP for WestRock is +2.93%.
WestRock’s shares have gained 80.5% over the past year, outperforming the industry’s growth of 65.6%.
Image Source: Zacks Investment Research
Other Stocks Poised to Beat Estimates
Here are some other companies in the basic materials space you may want to consider as our model shows that these too have the right combination of elements to post earnings beat this quarter:
GrowGeneration Corp. (GRWG - Free Report) has an Earnings ESP of +3.45% and carries a Zacks Rank of 2, at present.
Domtar Corporation , currently a Zacks #3 Ranked stock, has an Earnings ESP of +5.28%.
Wheaton Precious Metals Corp. (WPM - Free Report) has an Earnings ESP of +1.18% and carries a Zacks Rank #3, currently.
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What's in the Offing for WestRock's (WRK) Q3 Earnings?
WestRock Company (WRK - Free Report) is scheduled to report third-quarter fiscal 2021 results (ended as of Jun 30, 2021) on Aug 5, before the bell.
Q3 Estimates
The Zacks Consensus Estimate for fiscal third-quarter revenues is pegged at $4.6 billion, suggesting growth of 9.01% from the year-ago period. The same for earnings per share stands at 97 cents, indicating a year-over-year drop increase of 27.6%. The Zacks Consensus Estimate for the company’s fiscal third-quarter earnings moved north over the past 30 days.
Q2 Performance
WestRock’s adjusted earnings per share and revenues both missed the Zacks Consensus Estimate in the prior quarter and declined year over year as well. The company has a trailing four-quarter average earnings surprise of 20.04%.
Key Factors to Note
Packaging products are essential for the distribution of food, beverage and pharmaceutical products. Further, the pandemic-induced stay-at-home orders and restrictions worldwide have fueled demand for online grocery, beverage and pharmaceuticals delivery services, which, in turn, is driving e-commerce growth. Consequently, the company’s Consumer Packaging segment is anticipated to have benefited from elevated demand for the packaging of food, beverages, household cleaning and liquid packaging during the fiscal third quarter.
However, waning demand across few of WestRock’s businesses due to the coronavirus crisis might have weighed on the company’s performance. Demand in food service has been impacted by uncertainty in timing of reopening of restaurants, schools and other services. Commercial print demand has also been strained due to limited public events, and reduced retail and direct mail advertising. Luxury goods have also been hit hard. These factors are expected to have dented the company’s fiscal third-quarter performance. Also, maintenance downtime across the North American Corrugated Packaging and Consumer Packaging segment as well as escalating recycled fiber, chemical, and transportation costs might have unfavorably impacted the company during the fiscal third quarter.
WestRock acquired KapStone Paper and Packaging Corp in 2019, with the integration on track. The buyout has helped the company cement its presence in the Western United States. Further, the company continues to boost its North American corrugated packaging business margins. These moves are likely to have contributed to its performance during the quarter in review. In addition, productivity, performance-improvement programs across its manufacturing footprint and cost savings are anticipated to have aided the company’s performance during the quarter under review.
The Zacks Consensus Estimate for the Consumer Packaging segment’s quarterly revenues is pegged at $1,631 million, suggesting growth of 5% from the prior-year period. The segment’s adjusted EBITDA is estimated to have been up 5.7%, year over year, to $257 million.
For the Corrugated Packaging segment revenues, the Zacks Consensus Estimate is pinned at $3,031 million, calling for growth of 11% from year-ago quarter. Improved box shipment and increased demand from distribution, industrial and agricultural customers are likely to have aided the segment. The segment’s adjusted EBITDA is anticipated to have been up 15.5%, year over year, to $557 million.
WestRock Company Price and EPS Surprise
WestRock Company price-eps-surprise | WestRock Company Quote
What the Zacks Model Unveils
Our proven model predicts an earnings beat for WestRock this time around. The combination of a positive Earnings ESP, and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), increases the odds of an earnings beat but that is not the case here.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: The Earnings ESP for WestRock is +2.93%.
Zacks Rank: WestRock currently carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Share Price Performance
WestRock’s shares have gained 80.5% over the past year, outperforming the industry’s growth of 65.6%.
Image Source: Zacks Investment Research
Other Stocks Poised to Beat Estimates
Here are some other companies in the basic materials space you may want to consider as our model shows that these too have the right combination of elements to post earnings beat this quarter:
GrowGeneration Corp. (GRWG - Free Report) has an Earnings ESP of +3.45% and carries a Zacks Rank of 2, at present.
Domtar Corporation , currently a Zacks #3 Ranked stock, has an Earnings ESP of +5.28%.
Wheaton Precious Metals Corp. (WPM - Free Report) has an Earnings ESP of +1.18% and carries a Zacks Rank #3, currently.