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Smurfit Westrock (SW) to Report Q2 Earnings: What to Expect
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Smurfit Westrock PLC (SW - Free Report) is scheduled to report second-quarter fiscal 2024 results on Jul 30, after market close. The company made its debut on the New York Stock Exchange on Jul 8, 2024, following the completion of the combination of two major paper and packaging industry players, Smurfit Kappa and WestRock on Jul 5, 2024. The merger created a global leader in sustainable paper and packaging with operations spread across 40 countries with more than 500 packaging converting operations and 63 paper mills.
The upcoming earnings release will be the first for the combined entity, Smurfit Westrock, and the market is keen to see how it performs.
The Zacks Consensus Estimate for SW’s second-quarter revenues is pegged at $7.95 billion, indicating 55% growth from the year-ago quarter's reported figure. The same for earnings per share is pegged at 70 cents, indicating a year-over-year decline of 21%. The consensus mark for the company’s earnings has remained unchanged in the past seven days.
Image Source: Zacks Investment Research
Key Factors to Note
Smurfit Westrock is expected to achieve adjusted annual revenues of $34 billion and adjusted EBITDA of $5.5 billion. Annual pre-tax run-rate synergies are expected to exceed $400 million. Corrugated, paper and other packaging are expected to account for around 85% of revenues and consumer packaging is anticipated to contribute the remaining 15%.
Industry participants have been facing declines in volumes due to lower spending on goods by customers, which mainly reflected the persisting inflationary scenario. Customers have also been lowering their inventory, which had built up in response to high demand and supply-chain issues. However, industry players have recently indicated that customer destocking is likely to be over.
Nevertheless, the demand for corrugated packaging and containerboard for the packaging of essential items, such as food, beverages and medicines, has been stable. Strong growth in e-commerce and rising demand for paper as a sustainable packaging solution have favored the industry. These trends are expected to reflect in Smurfit Westrock’s results.
However, some of these gains are likely to have been offset by higher recycled fiber and labor costs. This is expected to have hurt margins. While some costs were expected to have been favorable sequentially (natural gas, virgin fiber, chemicals and freight), some are likely to have been higher than last year’s comparable quarter. Pricing actions and cost-saving initiatives are likely to have negated some of these headwinds.
What the Zacks Model Unveils
Our proven model indicates an earnings beat for Smurfit Westrock this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is just the case here, as you will see below.
Earnings ESP: The Earnings ESP for Smurfit Westrock is 13.75%. You can uncover the best stocks before they are reported with our Earnings ESP Filter.
Zacks Rank: SW currently has a Zacks Rank of 3.
Price Performance
Smurfit Westrock’s shares have fallen 2.8% in the past two weeks against the industry’s 1.1% growth.
Image Source: Zacks Investment Research
Other Stocks Poised to Beat Estimates
Here are some companies in the basic materials space, which according to our model, also have the right combination of elements to post an earnings beat this time around:
The Zacks Consensus Estimate for IAG’s earnings has been revised 14.3% upward over the past 60 days and is pegged at 8 cents per share. The estimate indicates a significant turnaround from the loss of 1 cent per share reported in the second quarter of 2023. IAG has an average trailing four-quarter earnings surprise of 187.5%.
SilverCrest Metals (SILV - Free Report) will release second-quarter earnings on Aug 7 and currently has an Earnings ESP of +2.94% and a Zacks Rank of 1.
The Zacks Consensus Estimate for SILV’s earnings is pegged at 17 cents per share, which indicates an improvement of 6% from the year-ago quarter’s actual. The estimate has moved up 6% over the past 60 days. SILV has an average trailing four-quarter earnings surprise of 42.4%.
Agnico Eagle Mines (AEM - Free Report) , scheduled to release second-quarter earnings on Jul 31, currently has an Earnings ESP of +4.63% and a Zacks Rank of 2.
The Zacks Consensus Estimate for AEM’s earnings is pegged at 87 cents per share, which indicates an improvement of 34% from the year-ago quarter’s actual. The estimate has moved up 7% over the past 60 days. AEM has an average trailing four-quarter earnings surprise of 16.5%.
Image: Bigstock
Smurfit Westrock (SW) to Report Q2 Earnings: What to Expect
Smurfit Westrock PLC (SW - Free Report) is scheduled to report second-quarter fiscal 2024 results on Jul 30, after market close. The company made its debut on the New York Stock Exchange on Jul 8, 2024, following the completion of the combination of two major paper and packaging industry players, Smurfit Kappa and WestRock on Jul 5, 2024. The merger created a global leader in sustainable paper and packaging with operations spread across 40 countries with more than 500 packaging converting operations and 63 paper mills.
The upcoming earnings release will be the first for the combined entity, Smurfit Westrock, and the market is keen to see how it performs.
The Zacks Consensus Estimate for SW’s second-quarter revenues is pegged at $7.95 billion, indicating 55% growth from the year-ago quarter's reported figure. The same for earnings per share is pegged at 70 cents, indicating a year-over-year decline of 21%. The consensus mark for the company’s earnings has remained unchanged in the past seven days.
Image Source: Zacks Investment Research
Key Factors to Note
Smurfit Westrock is expected to achieve adjusted annual revenues of $34 billion and adjusted EBITDA of $5.5 billion. Annual pre-tax run-rate synergies are expected to exceed $400 million. Corrugated, paper and other packaging are expected to account for around 85% of revenues and consumer packaging is anticipated to contribute the remaining 15%.
Industry participants have been facing declines in volumes due to lower spending on goods by customers, which mainly reflected the persisting inflationary scenario. Customers have also been lowering their inventory, which had built up in response to high demand and supply-chain issues. However, industry players have recently indicated that customer destocking is likely to be over.
Nevertheless, the demand for corrugated packaging and containerboard for the packaging of essential items, such as food, beverages and medicines, has been stable. Strong growth in e-commerce and rising demand for paper as a sustainable packaging solution have favored the industry. These trends are expected to reflect in Smurfit Westrock’s results.
However, some of these gains are likely to have been offset by higher recycled fiber and labor costs. This is expected to have hurt margins. While some costs were expected to have been favorable sequentially (natural gas, virgin fiber, chemicals and freight), some are likely to have been higher than last year’s comparable quarter. Pricing actions and cost-saving initiatives are likely to have negated some of these headwinds.
What the Zacks Model Unveils
Our proven model indicates an earnings beat for Smurfit Westrock this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is just the case here, as you will see below.
Earnings ESP: The Earnings ESP for Smurfit Westrock is 13.75%. You can uncover the best stocks before they are reported with our Earnings ESP Filter.
Zacks Rank: SW currently has a Zacks Rank of 3.
Price Performance
Smurfit Westrock’s shares have fallen 2.8% in the past two weeks against the industry’s 1.1% growth.
Other Stocks Poised to Beat Estimates
Here are some companies in the basic materials space, which according to our model, also have the right combination of elements to post an earnings beat this time around:
IAMGOLD (IAG - Free Report) , set to release second-quarter 2024 earnings on Aug 8, presently has an Earnings ESP of +8.33% and a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for IAG’s earnings has been revised 14.3% upward over the past 60 days and is pegged at 8 cents per share. The estimate indicates a significant turnaround from the loss of 1 cent per share reported in the second quarter of 2023. IAG has an average trailing four-quarter earnings surprise of 187.5%.
SilverCrest Metals (SILV - Free Report) will release second-quarter earnings on Aug 7 and currently has an Earnings ESP of +2.94% and a Zacks Rank of 1.
The Zacks Consensus Estimate for SILV’s earnings is pegged at 17 cents per share, which indicates an improvement of 6% from the year-ago quarter’s actual. The estimate has moved up 6% over the past 60 days. SILV has an average trailing four-quarter earnings surprise of 42.4%.
Agnico Eagle Mines (AEM - Free Report) , scheduled to release second-quarter earnings on Jul 31, currently has an Earnings ESP of +4.63% and a Zacks Rank of 2.
The Zacks Consensus Estimate for AEM’s earnings is pegged at 87 cents per share, which indicates an improvement of 34% from the year-ago quarter’s actual. The estimate has moved up 7% over the past 60 days. AEM has an average trailing four-quarter earnings surprise of 16.5%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.