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Paper Stocks to Watch for Earnings on Apr 26: WRK, FBR, KS
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The Paper and related products industry falls under the Basic Materials sector – one of the 16 broad Zacks sectors. The 15% of the companies in this sector that have reported so far have put up a 41.9% increase in earnings. Taking into account the companies that are yet to report, the sector’s earnings are expected to rise 11% in the quarter, a significant improvement from the 3.5% growth logged in the fourth quarter.
Looking at the broader picture, of the 95 S&P 500 members that have reported across all sectors, that constitute 24.9% of the index’s total market capitalization, earnings has gone up 14.3% for the first quarter. Considering all the companies that are yet to report, the S&P 500 is expected to register growth of 9.1% in the quarter, outperforming the 7.4% growth witnessed in the fourth quarter. It is worth mentioning that the earnings growth trajectory had entered the positive territory in third-quarter 2016, after five quarters of back-to-back declines. (Read more: Earnings Growth Accelerates in Q1)
Growing demand for paper for use in packaging materials continues to be the primary growth driver of the industry, while demand for printed paper remains tepid due to the ongoing transition to digital media and paperless communication across most developed economies. This has urged paper companies to restructure and transform business into core packaging companies.
Let’s have a look at how some paper stocks fare in their upcoming releases. Apart from beats and misses, focus will be on management outlook as well.
A global leader in providing packaging solutions and manufacturers of containerboard and paperboard, WestRock Company (WRK - Free Report) is scheduled to report second-quarter fiscal 2017 results on Apr 26, before the market opens.
WestRock recorded a 2.17% positive earnings surprise in the last reported quarter. The company also outpaced the Zacks Consensus Estimate in the trailing four quarters leading to an average positive surprise of 9.84%.
WestRock’s results in the quarter should benefit from volume, price and mix from seasonally higher volumes in both consumer and corrugated as well as four more box shipping days and less maintenance downtime. However, higher input costs will be e headwind.
Our proven model shows that WestRock is likely to beat earnings this quarter. This is because the company has the right combination of two key ingredients – a positive Earnings ESP (the percentage difference between the Most Accurate estimate and the Zacks Consensus Estimate) and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Fibria Celulose S.A. , produces, sells, and exports short fiber pulp in Brazil and internationally. The company is expected to release first-quarter results 2017 on Apr 26, before the opening bell.
In the last quarter, the company had delivered a negative earnings surprise of 150%. Fibria Celulose has trailed the Zacks Consensus Estimate in two of the four preceding quarters, with an average negative surprise of 56.43%.
Though Fibria Celulose’s Zacks Rank #3 increases the predictive power of the ESP, its 0.00% ESP makes surprise prediction difficult.
Manufacturer and seller of containerboards, corrugated products and specialty paper products, KapStone Paper and Packaging Corporation is scheduled to report first-quarter 2017 numbers after the market closes on Apr 26.
In the last quarter, the company had delivered a negative earnings surprise of 8.00%. KapStone Paper has trailed the Zacks Consensus Estimate in the four trailing quarters, with an average negative surprise of 8.39%.
KapStone Paper and Packaging Corporation Price and EPS Surprise
The company expects to benefit from improving prices on containerboard, both domestically and exports. Industry statistics are highly encouraging with high mill operating rates, reduced inventory levels and strong box shipment. The company anticipates these trends to continue and improve further as 2017 progresses.
The combination of KapStone Paper’s Zacks Rank #4 (Sell) and Earnings ESP of +4.55% makes a beat unlikely this quarter. As it is, we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
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Paper Stocks to Watch for Earnings on Apr 26: WRK, FBR, KS
The Paper and related products industry falls under the Basic Materials sector – one of the 16 broad Zacks sectors. The 15% of the companies in this sector that have reported so far have put up a 41.9% increase in earnings. Taking into account the companies that are yet to report, the sector’s earnings are expected to rise 11% in the quarter, a significant improvement from the 3.5% growth logged in the fourth quarter.
Looking at the broader picture, of the 95 S&P 500 members that have reported across all sectors, that constitute 24.9% of the index’s total market capitalization, earnings has gone up 14.3% for the first quarter. Considering all the companies that are yet to report, the S&P 500 is expected to register growth of 9.1% in the quarter, outperforming the 7.4% growth witnessed in the fourth quarter. It is worth mentioning that the earnings growth trajectory had entered the positive territory in third-quarter 2016, after five quarters of back-to-back declines. (Read more: Earnings Growth Accelerates in Q1)
Growing demand for paper for use in packaging materials continues to be the primary growth driver of the industry, while demand for printed paper remains tepid due to the ongoing transition to digital media and paperless communication across most developed economies. This has urged paper companies to restructure and transform business into core packaging companies.
Let’s have a look at how some paper stocks fare in their upcoming releases. Apart from beats and misses, focus will be on management outlook as well.
A global leader in providing packaging solutions and manufacturers of containerboard and paperboard, WestRock Company (WRK - Free Report) is scheduled to report second-quarter fiscal 2017 results on Apr 26, before the market opens.
WestRock recorded a 2.17% positive earnings surprise in the last reported quarter. The company also outpaced the Zacks Consensus Estimate in the trailing four quarters leading to an average positive surprise of 9.84%.
Westrock Company Price and EPS Surprise
Westrock Company Price and EPS Surprise | Westrock Company Quote
WestRock’s results in the quarter should benefit from volume, price and mix from seasonally higher volumes in both consumer and corrugated as well as four more box shipping days and less maintenance downtime. However, higher input costs will be e headwind.
Our proven model shows that WestRock is likely to beat earnings this quarter. This is because the company has the right combination of two key ingredients – a positive Earnings ESP (the percentage difference between the Most Accurate estimate and the Zacks Consensus Estimate) and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
WestRock’s Earnings ESP of +4.26% and a Zacks Rank #3 makes us confident of an earnings beat this quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.
Fibria Celulose S.A. , produces, sells, and exports short fiber pulp in Brazil and internationally. The company is expected to release first-quarter results 2017 on Apr 26, before the opening bell.
In the last quarter, the company had delivered a negative earnings surprise of 150%. Fibria Celulose has trailed the Zacks Consensus Estimate in two of the four preceding quarters, with an average negative surprise of 56.43%.
Fibria Celulose S.A. Price and EPS Surprise
Fibria Celulose S.A. Price and EPS Surprise | Fibria Celulose S.A. Quote
Though Fibria Celulose’s Zacks Rank #3 increases the predictive power of the ESP, its 0.00% ESP makes surprise prediction difficult.
Manufacturer and seller of containerboards, corrugated products and specialty paper products, KapStone Paper and Packaging Corporation is scheduled to report first-quarter 2017 numbers after the market closes on Apr 26.
In the last quarter, the company had delivered a negative earnings surprise of 8.00%. KapStone Paper has trailed the Zacks Consensus Estimate in the four trailing quarters, with an average negative surprise of 8.39%.
KapStone Paper and Packaging Corporation Price and EPS Surprise
KapStone Paper and Packaging Corporation Price and EPS Surprise | KapStone Paper and Packaging Corporation Quote
The company expects to benefit from improving prices on containerboard, both domestically and exports. Industry statistics are highly encouraging with high mill operating rates, reduced inventory levels and strong box shipment. The company anticipates these trends to continue and improve further as 2017 progresses.
The combination of KapStone Paper’s Zacks Rank #4 (Sell) and Earnings ESP of +4.55% makes a beat unlikely this quarter. As it is, we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>