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WestRock (WRK) Earnings & Revenues Top Estimates in Q4

Zacks Equity Research
·4 min read

WestRock Company WRK delivered fourth-quarter fiscal 2020 (ended Sep 30, 2020) loss per share of $4.45, as against the earnings per share of $1.20 recorded in the prior-year quarter.

Barring one-time items, adjusted earnings came in at 73 cents per share, surpassing the Zacks Consensus Estimate of 68 cents.

Operational Update

WestRock’s total revenues slid 3.8% year over year to $4,472 million. However, the revenue figure beat the Zacks Consensus Estimate of $4,314 million.

Cost of sales was up 2.3% year over year to $3,658 million during the fiscal fourth quarter. Gross profit declined 24.6% year over year to $813 million. Gross margin came in at 18.2% compared with the 23.2% reported in the prior-year period. Adjusted segment EBITDA was $721 million compared with the $891 million witnessed in the year-earlier quarter. Total segment income was around $373 million, down from the year-ago quarter’s $585 million.

WestRock Company Price, Consensus and EPS Surprise

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 dropped 4% year over year to $2,898 million in the September-end quarter primarily on lower corrugated selling price/mix, lower volumes, and unfavorable impact of the coronavirus pandemic and foreign currency. Adjusted segment EBITDA decreased 19.8% year over year to $513 million.

Consumer Packaging: Sales in the segment slid 2.5% year on year to $1,627 million. This downside resulted from lower selling price/mix, dismal volumes, and unfavorable impact of the pandemic. Adjusted segment EBITDA declined 17% year over year to $223 million.

Fiscal 2020 Performance

Including one-time items, the company reported a loss of $2.67 per share in fiscal 2020 as against the earnings per share of $3.33 recorded in the prior fiscal year. WestRock’s total revenues were down 3.8% year over year to $17.6 billion.

Financial Position

As of fiscal 2020 end, cash and cash equivalents were $251 million, significantly up from the $152 million witnessed at the end of fiscal 2019. Total debt was $9.4 billion at the end of fiscal 2020 compared with the $10.2 billion recorded at the end of fiscal 2019. Cash flow from operations was $2,071 million in fiscal 2020 compared with the prior fiscal’s $2,310 million. In fiscal 2020, WestRock invested $978 million in capital expenditure and paid out $345 million in dividends.

The company is focused on meeting the rising demand for sustainable, fiber-based packaging solutions, and executing strategies for boosting financial strength and liquidity to counter the pandemic-related setbacks.

Price Performance

Shares of WestRock have gained 30.6% over the past three months, outperforming the industry’s growth of 18.1%.


 

Zacks Rank & Other Stocks to Consider

WestRock currently sports a Zacks Rank #1 (Strong Buy).

Some other top-ranked stocks in the basic materials space are Agnico Eagle Mines Limited AEM, Newmont Corporation NEM and Barrick Gold Corporation GOLD. While Agnico Eagle Mines and Newmont flaunt a Zacks Rank #1, Barrick Gold carries a Zacks Rank of 2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Agnico Eagle Mines Limited has an expected earnings growth rate of a whopping 103% for the current year. The company’s shares have rallied 38% over the past year.

Newmont has a projected earnings growth rate of 98% for 2020. The company’s shares have gained 72% in a year’s time.

Barrick Gold has an estimated earnings growth rate of 99% for the ongoing year. Its shares have appreciated 67% in the past year.

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Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.

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Newmont Corporation (NEM) : Free Stock Analysis Report
 
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