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WestRock Completed the Separation of Its Specialty Chemicals Business

Gabriel Kane

Yesterday’s Consumer Pops and Drops: WRK, FCAU, THS, and PHG

(Continued from Prior Part)

Price movement of WestRock

WestRock (WRK) has a market cap of $10.0 billion. It fell by 6.9% to close at $39.63 per share on May 16, 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were -4.7%, 3.6%, and -11.3%, respectively, as of the same day. This means that WRK is trading 2.5% below its 20-day moving average, 2.2% above its 50-day moving average, and 12.6% below its 200-day moving average.

Related ETF and peers

The iShares Global Timber & Forestry ETF (WOOD) invests 3.1% of its holdings in WestRock. The ETF tracks the 25 largest publicly listed companies that own or manage forests and timberlands. The YTD price movement of WOOD was -0.10% as of May 16, 2016.

The market caps of WestRock’s competitors are as follows:

  • International Paper Company (IP) — $17.6 billion

  • Packaging Corporation of America (PKG) — $6.4 billion

  • Graphic Packaging Holding Company (GPK) — $4.4 billion

WestRock separated its business

WestRock completed the separation of its specialty chemical business, Ingevity (NGVT). The company shareholders have received one common share of Ingevity for six common shares of WestRock held at the close of business on May 4, 2016. Its shareholders received cash in lieu of fractional NGVT shares.

Performance of WestRock in fiscal 2Q16

WestRock reported fiscal 2Q16 net sales of $3,696.6 million, a rise of 50.5% compared to net sales of $2,455.6 million in fiscal 2Q15. Sales from corrugated packaging and consumer packaging segments rose by 7.4% and 128.6%, respectively, in fiscal 2Q16 compared to the corresponding period last year. It reported sales of specialty chemicals and land and development of $203.9 million and $18.7 million, respectively, in fiscal 2Q16. The company reported restructuring and other costs of $131.2 million in fiscal 2Q16 compared to $17.2 million in fiscal 2Q15.

Its net income and EPS (earnings per share) fell to $56.9 million and $0.22, respectively, in fiscal 2Q16, compared to $109.8 million and $0.77, respectively, in fiscal 2Q15. The company reported adjusted EPS of $0.61 in fiscal 2Q16.

WestRock’s cash and cash equivalents and inventories rose by 61.0% and 4.9%, respectively, in fiscal 2Q16 compared to fiscal 4Q15. Its current ratio fell to 1.7x, and its debt-to-equity ratio rose to 1.3x in fiscal 2Q16, compared to a current ratio and a debt-to-equity ratio of 1.9x and 1.2x, respectively, in fiscal 4Q15.

In the next part, we’ll look at Fiat Chrysler Automobiles.

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