WestRock (WRK) to Report Q4 Earnings: What's in the Cards?
WestRock Company WRK is scheduled to report fourth-quarter fiscal 2023 results (ended Sep 30, 2023) on Nov 9, before the opening bell.
Q4 Estimates
The Zacks Consensus Estimate for WRK’s fiscal fourth-quarter revenues is pegged at $5.10 billion, suggesting a fall of 5.6% from the year-ago quarter's reported figure. The same for earnings per share is pegged at 75 cents, indicating a year-over-year decline of 47.6%. The consensus mark for the company’s fiscal fourth-quarter earnings has moved up 9% in the past 60 days.
WestRock Company Price and EPS Surprise
WestRock Company price-eps-surprise | WestRock Company Quote
Q3 Performance
In the last reported quarter, WestRock registered year-over-year declines in adjusted earnings per share and revenues. While the top line missed the consensus estimate, earnings beat the same.
WRK’s earnings have surpassed the Zacks Consensus Estimate in three of the last four trailing quarters, while falling short in one quarter, delivering an earnings surprise of 30.7%, on average.
Key Factors to Note
WestRock has been witnessing a slowdown in volumes in the corrugated packaging segment over the past few quarters. This has been mainly due to muted customer spending due to the inflationary scenario. Customers have also been rebalancing their inventory destocking.
Despite this overall weakness, the demand for corrugated packaging and containerboard for the packaging of essential items such as food, beverage and medicines are likely to have been stable. However, considering that the company has been facing labor shortages and supply-chain issues, this is expected to have impacted the shipments to customers. All of these factors are likely to get reflected in the company’s top-line results in the fourth quarter of fiscal 2023.
While some costs were expected to have been favorable sequentially (natural gas, virgin fiber, chemicals and freight), the same is likely to have been higher than last year’s comparable quarter. Higher recycled fiber costs are also likely to have hurt its margins.
Pricing actions and productivity initiatives undertaken by the company are likely to have negated some of these headwinds. The company is expected to finish fiscal 2023 with a cost-saving run-rate of more than $450 million. A portion of this is expected to have benefited its fiscal fourth-quarter performance.
Segmental Projections
The Zacks Consensus Estimate for WRK’s Consumer Packaging segment’s quarterly revenues is pegged at $1,214 million, suggesting a 0.1% drop from the prior-year period's reported figure. The segment’s adjusted EBITDA is estimated to be $135.3 million, indicating a year-over-year plunge of 38.3%.
For the Corrugated Packaging segment’s revenues, the consensus estimate is pinned at $2,587 million, implying growth of 8.4% from the year-ago quarter's reported number. The segment’s adjusted EBITDA is projected at $241.20 million, indicating a 37.2% year-over-year fall.
The revenue estimate for the Paper segment is pegged at $1,034 million, suggesting a decline of 27.6% from the prior-year reported figure. The same for the Distribution segment is pinned at $330 million, indicating a 12% year-over-year decline.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for 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.
Earnings ESP: The Earnings ESP for WestRock is 0.00%. You can uncover the best stocks before they're reported with our Earnings ESP Filter.
Zacks Rank: WRK currently carries a Zacks Rank #2 (Buy).
Price Performance
WestRock’s shares have gained 11.7% over the past year compared with the industry’s 4.8% growth.
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Stocks to Consider
Here are some stocks with the right combination of elements to post an earnings beat in their upcoming releases.
Ollie's Bargain Outlet Holdings, Inc. OLLI, scheduled to release third-quarter earnings on Dec 6, currently has an Earnings ESP of +3.75% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for OLLI’s third-quarter earnings is pegged at 43 cents. The consensus estimate for the company’s quarterly earnings has been unchanged in the past 60 days. It has an average trailing four-quarter earnings surprise of 1.3%.
Dutch Bros Inc. BROS, scheduled to release third-quarter 2023 earnings on Nov 7, presently has an Earnings ESP of +12.18% and a Zacks Rank of 2.
The Zacks Consensus Estimate for Dutch Bros’ third-quarter earnings has been unchanged in the past 60 days. The consensus estimate for BROS’ earnings for the quarter is pegged at 7 cents. It has an average trailing four-quarter earnings surprise of 44.6%.
Kinross Gold Corporation KGC, scheduled to release third-quarter earnings on Nov 8, currently has an Earnings ESP of +5.32% and a Zacks Rank of 3.
The consensus estimate for Kinross Gold’s earnings for the third quarter is pegged at 10 cents per share. Earnings estimates have been moved north by 11% in the past 60 days. It has an average trailing four-quarter earnings surprise of 31.7%.
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Ollie's Bargain Outlet Holdings, Inc. (OLLI) : Free Stock Analysis Report
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