We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
WestRock (WRK) Q3 Earnings & Sales Miss Estimates, Dip Y/Y
Read MoreHide Full Article
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.
WestRock Company Price, Consensus and EPS Surprise
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.
Image Source: Zacks Investment Research
Zacks Rank & Stocks to Consider
WestRock currently carries a Zacks Rank #5 (Strong Sell).
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.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
WestRock (WRK) Q3 Earnings & Sales Miss Estimates, Dip Y/Y
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.
WestRock Company Price, Consensus and EPS Surprise
WestRock Company price-consensus-eps-surprise-chart | WestRock Company Quote
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.
Image Source: Zacks Investment Research
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.