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WestRock (WRK) Q3 Earnings & Sales Miss Estimates, Dip Y/Y
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WestRock Company 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.
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WestRock (WRK) Q3 Earnings & Sales Miss Estimates, Dip Y/Y
WestRock Company 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.