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WestRock (WRK) Earnings Surpass Estimates in Q3, Up Y/Y
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WestRock Company (WRK - Free Report) reported adjusted earnings of $1.54 per share in third-quarter fiscal 2022 (ended Jun 30, 2022), beating the Zacks Consensus Estimate of $1.50. The bottom line marked year-over-year growth of 54%, driven by higher selling price/mix and solid performances across all of its segments. The upside was partly offset by increased cost inflation, higher operating costs and lower volumes.
Including one-time items, earnings were $1.47 per share compared with 93 cents per share reported in the prior-year quarter.
WestRock’s total revenues advanced 14.6% year over year to a record $5.52 billion, which came in line with the Zacks Consensus Estimate.
Cost of sales was up 12% year over year to $4,360 million in the fiscal third quarter. Gross profit improved 25% year over year to $1,159 million. Adjusted segment EBITDA was $1,006 million compared with $811 million in the year-earlier quarter, driven by strength across the segments, primarily in the Global Paper and Consumer Packaging.
WestRock Company Price, Consensus and EPS Surprise
Sales in the Corrugated Packaging segment were up 10.6% year over year to $2,382 million during the quarter under review. Adjusted segment EBITDA increased 5.9% year over year to $385 million.
The Consumer Packaging segment reported sales of $1,270 million, up 12% year over year. Adjusted segment EBITDA rose 28% year over year to $235 million.
Sales in the Paper segment moved up 24% year over year to $1,610 million. Adjusted segment EBITDA surged 51% year over year to $399 million.
The Distribution segment’s sales improved 11% year over year to $358 million. Adjusted segment EBITDA rose 6.7% year over year to $19 million.
Financial Position
WestRock had cash and cash equivalents of $305 million as of Jun 30, 2022, compared with $291 million as of Sep 30, 2021. The company reported total debt of $8.0 billion as of the end of third-quarter 2022, down from $8.2 billion at the end of fiscal 2021.
Net cash provided by operating activities in the third quarter of fiscal 2022 was $837 million compared with $751 million in the prior-year quarter. During the quarter under review, WestRock invested $215 million in capital expenditures, spent $290 million on share repurchases and paid out $64 million as dividends.
Price Performance
Shares of WestRock have fallen 13.2% in the past year compared with the industry’s decline of 17%.
Image Source: Zacks Investment Research
Zacks Rank & Stocks to Consider
WestRock currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks worth considering in the basic materials space include Cabot Corporation (CBT - Free Report) , ATI Inc. (ATI - Free Report) and Albemarle Corporation (ALB - Free Report) .
Cabot, currently carrying a Zacks Rank #1 (Strong Buy), has an expected earnings growth rate of 22.5% for the current fiscal year. The Zacks Consensus Estimate for CBT's earnings for the current fiscal has been revised 0.8% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Cabot’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 16.2%. CBT has gained around 32% over a year.
ATI, currently carrying a Zacks Rank #2 (Buy), has a projected earnings growth rate of 1,069.2% for the current year. The Zacks Consensus Estimate for ATI's current-year earnings has been revised 12.5% upward in the past 60 days.
ATI’s earnings beat the Zacks Consensus Estimate in the last four quarters. It has a trailing four-quarter earnings surprise of roughly 128.9%, on average. ATI shares are up around 26% in a year.
Albemarle has a projected earnings growth rate of 247% for the current year. The Zacks Consensus Estimate for ALB’s current-year earnings has been revised 7.8% upward in the past 60 days.
Albemarle’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 20%. ALB has gained roughly 18% in a year. The company has a Zacks Rank #2.
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WestRock (WRK) Earnings Surpass Estimates in Q3, Up Y/Y
WestRock Company (WRK - Free Report) reported adjusted earnings of $1.54 per share in third-quarter fiscal 2022 (ended Jun 30, 2022), beating the Zacks Consensus Estimate of $1.50. The bottom line marked year-over-year growth of 54%, driven by higher selling price/mix and solid performances across all of its segments. The upside was partly offset by increased cost inflation, higher operating costs and lower volumes.
Including one-time items, earnings were $1.47 per share compared with 93 cents per share reported in the prior-year quarter.
WestRock’s total revenues advanced 14.6% year over year to a record $5.52 billion, which came in line with the Zacks Consensus Estimate.
Cost of sales was up 12% year over year to $4,360 million in the fiscal third quarter. Gross profit improved 25% year over year to $1,159 million. Adjusted segment EBITDA was $1,006 million compared with $811 million in the year-earlier quarter, driven by strength across the segments, primarily in the Global Paper and Consumer Packaging.
WestRock Company Price, Consensus and EPS Surprise
WestRock Company price-consensus-eps-surprise-chart | WestRock Company Quote
Segmental Performance
Sales in the Corrugated Packaging segment were up 10.6% year over year to $2,382 million during the quarter under review. Adjusted segment EBITDA increased 5.9% year over year to $385 million.
The Consumer Packaging segment reported sales of $1,270 million, up 12% year over year. Adjusted segment EBITDA rose 28% year over year to $235 million.
Sales in the Paper segment moved up 24% year over year to $1,610 million. Adjusted segment EBITDA surged 51% year over year to $399 million.
The Distribution segment’s sales improved 11% year over year to $358 million. Adjusted segment EBITDA rose 6.7% year over year to $19 million.
Financial Position
WestRock had cash and cash equivalents of $305 million as of Jun 30, 2022, compared with $291 million as of Sep 30, 2021. The company reported total debt of $8.0 billion as of the end of third-quarter 2022, down from $8.2 billion at the end of fiscal 2021.
Net cash provided by operating activities in the third quarter of fiscal 2022 was $837 million compared with $751 million in the prior-year quarter. During the quarter under review, WestRock invested $215 million in capital expenditures, spent $290 million on share repurchases and paid out $64 million as dividends.
Price Performance
Shares of WestRock have fallen 13.2% in the past year compared with the industry’s decline of 17%.
Image Source: Zacks Investment Research
Zacks Rank & Stocks to Consider
WestRock currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks worth considering in the basic materials space include Cabot Corporation (CBT - Free Report) , ATI Inc. (ATI - Free Report) and Albemarle Corporation (ALB - Free Report) .
Cabot, currently carrying a Zacks Rank #1 (Strong Buy), has an expected earnings growth rate of 22.5% for the current fiscal year. The Zacks Consensus Estimate for CBT's earnings for the current fiscal has been revised 0.8% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Cabot’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 16.2%. CBT has gained around 32% over a year.
ATI, currently carrying a Zacks Rank #2 (Buy), has a projected earnings growth rate of 1,069.2% for the current year. The Zacks Consensus Estimate for ATI's current-year earnings has been revised 12.5% upward in the past 60 days.
ATI’s earnings beat the Zacks Consensus Estimate in the last four quarters. It has a trailing four-quarter earnings surprise of roughly 128.9%, on average. ATI shares are up around 26% in a year.
Albemarle has a projected earnings growth rate of 247% for the current year. The Zacks Consensus Estimate for ALB’s current-year earnings has been revised 7.8% upward in the past 60 days.
Albemarle’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 20%. ALB has gained roughly 18% in a year. The company has a Zacks Rank #2.