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Veritiv Corporation reported record earnings per share of $5.12 for first-quarter 2022, reflecting a 300% surge from the year-ago period. This upside was driven by double-digit sales growth and year-over-year adjusted EBITDA margin improvements across each of its segments. The bottom line beat the Zacks Consensus Estimate of $3.73 by 37%.
Veritiv’s total revenues increased 19% year over year to $1,858 million. Cost of sales was up 18% year on year to $1,455 million for the reported quarter. Gross profit improved 25% year over year to $403 million. Gross margin was 21.7% for the first quarter compared with the prior-year period’s 20.6%.
Adjusted EBITDA was $120 million, reflecting a 101% surge from the year-earlier quarter. Adjusted EBITDA margin expanded to 6.4% from 3.8% in the prior-year quarter. With this, Veritiv delivered the ninth consecutive quarter of year-over-year improvement in adjusted EBITDA on operational improvements.
Veritiv Corporation Price, Consensus and EPS Surprise
Veritiv had cash and cash equivalents of $33.8 million as of Mar 31, 2022, down from $49.3 million held on Dec 31, 2021. Long-term debt was $511.5 million as of Mar 31, 2022, up from $499.7 million on Dec 31, 2021. The company ended the year with a net leverage ratio of 1.1.
Net cash used in operating activities in first-quarter 2021 was $5.9 million compared with the prior-year period’s inflow of $13.2 million. Veritiv announced that the board of directors approved a $200-million share repurchase program in March. The company repurchased around $53 million of its shares till May 6, 2022.
Veritiv recently completed the Veritiv Canada, Inc. business sale to Imperial Dade. The company can now focus on its strategy to invest in high-growth, higher-margin businesses as well as geographies and capitalize on its industry-leading Packaging and Facility Solutions capabilities.
2022 Guidance Raised
Veritiv raised its net income guidance for 2022 to the range of $270-$305 million from the previous band of $210-$250 million. Earnings per share are expected between $18.00 and $21.00 compared with the previous expectation of $13.50-$16.25 for the year. Veritiv anticipates adjusted EBITDA in the range of $445-$485 million, up from the previous guided range of $395-$435 million.
Free cash flow for 2022 is expected to be $250 million, with a capital expenditure of around $30 million. Net cash provided by operating activities is projected to be $280 million.
Price Performance
Image Source: Zacks Investment Research
Shares of Veritiv have skyrocketed 179.3% in a year’s time against the industry’s 19.4% decline.
Zacks Rank & Stocks to Consider
Veritiv currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the basic materials space include Steel Dynamics, Inc. (STLD - Free Report) , Commercial Metals Company (CMC - Free Report) and AdvanSix Inc. (ASIX - Free Report) .
Steel Dynamics, currently sporting a Zacks Rank #1 (Strong Buy), has an expected earnings growth rate of 18.5% for the current year. The Zacks Consensus Estimate for STLD's earnings for the current year has been revised 32.5% upward over the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Steel Dynamics beat the Zacks Consensus Estimate for earnings in each of the last four quarters, with the average being roughly 2.5%. STLD has gained around 20% in the past year.
Commercial Metals, presently carrying a Zacks Rank #1, has a projected earnings growth rate of 78.2% for the current fiscal year. The Zacks Consensus Estimate for CMC's earnings for the current fiscal year has been revised 31.9% upward over the past 60 days.
Commercial Metals beat the Zacks Consensus Estimate for earnings in three of the last four quarters and missed the same on one occasion. It has a trailing four-quarter earnings surprise of roughly 16%, on average. CMC has gained around 16% in a year.
AdvanSix, carrying a Zacks Rank #1 at present, has an expected earnings growth rate of 63.4% for the current year. ASIX's consensus estimate for earnings for the current year has been revised 31.9% upward in the past 60 days.
AdvanSix beat the Zacks Consensus Estimate for earnings in three of the trailing four quarters and missed the same once. It has a trailing four-quarter earnings surprise of roughly 23.6%, on average. ASIX has rallied around 47% over a year.
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Veritiv (VRTV) Surpasses Q1 Earnings Estimates, Ups 22' View
Veritiv Corporation reported record earnings per share of $5.12 for first-quarter 2022, reflecting a 300% surge from the year-ago period. This upside was driven by double-digit sales growth and year-over-year adjusted EBITDA margin improvements across each of its segments. The bottom line beat the Zacks Consensus Estimate of $3.73 by 37%.
Veritiv’s total revenues increased 19% year over year to $1,858 million. Cost of sales was up 18% year on year to $1,455 million for the reported quarter. Gross profit improved 25% year over year to $403 million. Gross margin was 21.7% for the first quarter compared with the prior-year period’s 20.6%.
Adjusted EBITDA was $120 million, reflecting a 101% surge from the year-earlier quarter. Adjusted EBITDA margin expanded to 6.4% from 3.8% in the prior-year quarter. With this, Veritiv delivered the ninth consecutive quarter of year-over-year improvement in adjusted EBITDA on operational improvements.
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 $33.8 million as of Mar 31, 2022, down from $49.3 million held on Dec 31, 2021. Long-term debt was $511.5 million as of Mar 31, 2022, up from $499.7 million on Dec 31, 2021. The company ended the year with a net leverage ratio of 1.1.
Net cash used in operating activities in first-quarter 2021 was $5.9 million compared with the prior-year period’s inflow of $13.2 million. Veritiv announced that the board of directors approved a $200-million share repurchase program in March. The company repurchased around $53 million of its shares till May 6, 2022.
Veritiv recently completed the Veritiv Canada, Inc. business sale to Imperial Dade. The company can now focus on its strategy to invest in high-growth, higher-margin businesses as well as geographies and capitalize on its industry-leading Packaging and Facility Solutions capabilities.
2022 Guidance Raised
Veritiv raised its net income guidance for 2022 to the range of $270-$305 million from the previous band of $210-$250 million. Earnings per share are expected between $18.00 and $21.00 compared with the previous expectation of $13.50-$16.25 for the year. Veritiv anticipates adjusted EBITDA in the range of $445-$485 million, up from the previous guided range of $395-$435 million.
Free cash flow for 2022 is expected to be $250 million, with a capital expenditure of around $30 million. Net cash provided by operating activities is projected to be $280 million.
Price Performance
Image Source: Zacks Investment Research
Shares of Veritiv have skyrocketed 179.3% in a year’s time against the industry’s 19.4% decline.
Zacks Rank & Stocks to Consider
Veritiv currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the basic materials space include Steel Dynamics, Inc. (STLD - Free Report) , Commercial Metals Company (CMC - Free Report) and AdvanSix Inc. (ASIX - Free Report) .
Steel Dynamics, currently sporting a Zacks Rank #1 (Strong Buy), has an expected earnings growth rate of 18.5% for the current year. The Zacks Consensus Estimate for STLD's earnings for the current year has been revised 32.5% upward over the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Steel Dynamics beat the Zacks Consensus Estimate for earnings in each of the last four quarters, with the average being roughly 2.5%. STLD has gained around 20% in the past year.
Commercial Metals, presently carrying a Zacks Rank #1, has a projected earnings growth rate of 78.2% for the current fiscal year. The Zacks Consensus Estimate for CMC's earnings for the current fiscal year has been revised 31.9% upward over the past 60 days.
Commercial Metals beat the Zacks Consensus Estimate for earnings in three of the last four quarters and missed the same on one occasion. It has a trailing four-quarter earnings surprise of roughly 16%, on average. CMC has gained around 16% in a year.
AdvanSix, carrying a Zacks Rank #1 at present, has an expected earnings growth rate of 63.4% for the current year. ASIX's consensus estimate for earnings for the current year has been revised 31.9% upward in the past 60 days.
AdvanSix beat the Zacks Consensus Estimate for earnings in three of the trailing four quarters and missed the same once. It has a trailing four-quarter earnings surprise of roughly 23.6%, on average. ASIX has rallied around 47% over a year.