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WestRock (WRK) Q3 Earnings & Sales Beat Estimates, Up Y/Y

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WestRock Company reported third-quarter fiscal 2021 (ended Jun 30, 2021) adjusted earnings of $1 per share, reflecting year-over-year growth of 32%. Also, the fiscal third-quarter earnings beat the Zacks Consensus Estimate of 97 cents. This upside was driven by strong demand for the company’s products and solutions across its end markets and pricing actions.

Including one-time items, earnings came in at 93 cents per share compared with the 69 cents reported in the prior-year quarter.

Operational Update

WestRock’s total revenues went up 14% year over year to $4,816 million. The revenue figure surpassed the consensus mark of $4,618 million.

Cost of sales was up 12.1% year on year to $3,866 million during the fiscal third quarter. Gross profit increased 21% year over year to $929.9 million. Adjusted segment EBITDA was $811 million compared with the $708 million witnessed in the year-earlier quarter. Total segment income came in at $454 million, up from the year-ago quarter’s $323 million.

WestRock Company Price, Consensus and EPS Surprise

WestRock Company Price, Consensus and EPS Surprise

WestRock Company price-consensus-eps-surprise-chart | WestRock Company Quote

Segmental Performance

Corrugated Packaging: Sales in the segment were up 16% year over year to $3,167 million during the June-end quarter primarily on higher selling price/mix, higher volumes and favorable foreign-currency impacts. Adjusted segment EBITDA increased 16% year over year to $557 million.

Consumer Packaging: Sales in the segment grew 12% year on year to $1,735 million. This upside resulted from higher selling price/mix, improved volumes and favorable impacts of foreign currency translation. Adjusted segment EBITDA climbed 11% year over year to $269 million.

Financial Position

WestRock had cash and cash equivalents of $549.8 million as of Jun 30, 2021, up from the $251 million reported as of Sep 30, 2020. The company reported total debt of $8.67 billion as of Jun 30, 2021, down from $9.43 billion as of Sep 30, 2020.

Net cash provided by operating activities for third-quarter fiscal 2021 was $751 million as compared with the $740 million recorded in the prior-year quarter. During the fiscal third quarter, WestRock invested $202 million in capital expenditures and paid out $64 million in dividends to stockholders.

Price Performance

Shares of WestRock have appreciated 66.7%, over the past year, compared with the industry’s growth of 61.2%.

Zacks Investment Research
Image Source: Zacks Investment Research

Zacks Rank & Stocks to Consider

WestRock currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the basic materials space include Nucor Corporation (NUE - Free Report) , Cabot Corporation (CBT - Free Report) and Dow Inc. (DOW - Free Report) .

Nucor has a projected earnings growth rate of 455% for the current year. The company’s shares have soared 130.6% in a year’s time. It currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Cabot has an expected earnings growth rate of 137% for the current fiscal year. The company’s shares have surged 42.4% in the past year. It currently sports a Zacks Rank #1.

Dow has an expected earnings growth rate of 403% for the current year. The company’s shares have gained 45.4% in the past year. It currently carries a Zacks Rank #2 (Buy).


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