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Veritiv Corporation reported earnings per share of a record $3.67 in fourth-quarter 2021, reflecting a 93% improvement from the year-ago quarter. This upside was driven by continued Packaging sales growth and operational efficiencies. The bottom line beat the Zacks Consensus Estimate of $2.66 by a margin of 38%.
Veritiv’s total revenues increased 13.5% year over year to $1,865 million.
Cost of sales was up 11.2% year on year to $1,459 million during the reported quarter. Gross profit improved 23% year over year to $406 million. Gross margin was 21.8% in the fourth quarter compared with the prior-year quarter’s 20.1%.
Adjusted EBITDA was $116 million, reflecting an 87.8% surge from the year-earlier quarter. Adjusted EBITDA margin expanded to a record 6.2% from 3.8% in the prior-year quarter.
Veritiv Corporation Price, Consensus and EPS Surprise
Veritiv had cash and cash equivalents of $49.3 million as of Dec 31, 2021, down from $121 million held as of Dec 31, 2020. Long-term debt was $499.7 million as of Dec 31, 2021, down from $589.1 million as of Dec 31, 2020. The company ended the year with a record-low net leverage ratio of 1.1x.
Net cash provided by operating activities in 2021 was $155 million compared with the prior year’s $289 million. Veritiv announced that its board of directors has approved a $200 million share repurchase program.
2022 Guidance
Veritiv expects net income in the range of $210 million to $250 million in 2022. Earnings per share are expected in the band of $13.50-$16.25 for the year. Veritiv anticipates adjusted EBITDA in the range of $395 million to $435 million.
The company expects supplier-driven price increases to continue during the first half of the year. It predicts adjusted EBITDA margins for the segments to be at par with prior-year levels or to deliver a slight year-over-year improvement aided by continued cost and price discipline and ongoing initiatives to mitigate the impacts of inflation.
Free cash flow for 2022 is expected to be at around $200 million, with capital expenditures at around $35 million.
Price Performance
Shares of Veritiv have skyrocketed 391.7% in a year’s time, against the industry’s decline of 8.8%.
Teck Resources has a projected earnings growth rate of 21.5% for the current fiscal year. The Zacks Consensus Estimate for TECK's current fiscal year earnings has been revised upward by 28% in the past 60 days.
Teck Resources beat the Zacks Consensus Estimate for earnings in three of the trailing four quarters and missed once, the average surprise being 13%. TECK’s shares have surged around 74% in a year.
Cabot has a projected earnings growth rate of 7.6% for the current year. The Zacks Consensus Estimate for CBT’s current-year earnings has been revised upward by 8% in the past 60 days.
Cabot beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average surprise being 21.6%. CBT has rallied around 43% in a year.
Allegheny has an expected earnings growth rate of 661.5% for the current year. The Zacks Consensus Estimate for ATI's current-year earnings has been revised upward by 46% in the past 60 days.
Allegheny beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average surprise being 127.2%. ATI has appreciated around 26% over a year.
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Veritiv (VRTV) Q4 Earnings Surpass Estimates, Improve Y/Y
Veritiv Corporation reported earnings per share of a record $3.67 in fourth-quarter 2021, reflecting a 93% improvement from the year-ago quarter. This upside was driven by continued Packaging sales growth and operational efficiencies. The bottom line beat the Zacks Consensus Estimate of $2.66 by a margin of 38%.
Veritiv’s total revenues increased 13.5% year over year to $1,865 million.
Cost of sales was up 11.2% year on year to $1,459 million during the reported quarter. Gross profit improved 23% year over year to $406 million. Gross margin was 21.8% in the fourth quarter compared with the prior-year quarter’s 20.1%.
Adjusted EBITDA was $116 million, reflecting an 87.8% surge from the year-earlier quarter. Adjusted EBITDA margin expanded to a record 6.2% from 3.8% in the prior-year quarter.
Veritiv Corporation Price, Consensus and EPS Surprise
Veritiv Corporation price-consensus-eps-surprise-chart | Veritiv Corporation Quote
Financial Position
Veritiv had cash and cash equivalents of $49.3 million as of Dec 31, 2021, down from $121 million held as of Dec 31, 2020. Long-term debt was $499.7 million as of Dec 31, 2021, down from $589.1 million as of Dec 31, 2020. The company ended the year with a record-low net leverage ratio of 1.1x.
Net cash provided by operating activities in 2021 was $155 million compared with the prior year’s $289 million. Veritiv announced that its board of directors has approved a $200 million share repurchase program.
2022 Guidance
Veritiv expects net income in the range of $210 million to $250 million in 2022. Earnings per share are expected in the band of $13.50-$16.25 for the year. Veritiv anticipates adjusted EBITDA in the range of $395 million to $435 million.
The company expects supplier-driven price increases to continue during the first half of the year. It predicts adjusted EBITDA margins for the segments to be at par with prior-year levels or to deliver a slight year-over-year improvement aided by continued cost and price discipline and ongoing initiatives to mitigate the impacts of inflation.
Free cash flow for 2022 is expected to be at around $200 million, with capital expenditures at around $35 million.
Price Performance
Shares of Veritiv have skyrocketed 391.7% in a year’s time, against the industry’s decline of 8.8%.
Image Source: Zacks Investment Research
Zacks Rank & Stocks to Consider
Veritiv currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the basic materials space include Teck Resources (TECK - Free Report) , Cabot Corporation (CBT - Free Report) and Allegheny Technologies Incorporated (ATI - Free Report) . All of these stocks carry a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Teck Resources has a projected earnings growth rate of 21.5% for the current fiscal year. The Zacks Consensus Estimate for TECK's current fiscal year earnings has been revised upward by 28% in the past 60 days.
Teck Resources beat the Zacks Consensus Estimate for earnings in three of the trailing four quarters and missed once, the average surprise being 13%. TECK’s shares have surged around 74% in a year.
Cabot has a projected earnings growth rate of 7.6% for the current year. The Zacks Consensus Estimate for CBT’s current-year earnings has been revised upward by 8% in the past 60 days.
Cabot beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average surprise being 21.6%. CBT has rallied around 43% in a year.
Allegheny has an expected earnings growth rate of 661.5% for the current year. The Zacks Consensus Estimate for ATI's current-year earnings has been revised upward by 46% in the past 60 days.
Allegheny beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average surprise being 127.2%. ATI has appreciated around 26% over a year.