Clearwater Paper Corporation
CLW
reported fourth-quarter 2020 adjusted earnings per share of $1.45, which missed the Zacks Consensus Estimate of $1.62. However, the bottom line soared 292% from 37 cents reported in the prior-year quarter aided by continued elevated demand for tissue products and solid operational execution.
Including one-time items, the company reported earnings of $1.34 per share compared with 12 cents per share in the prior-year quarter.
The company generated revenues of $453 million in fourth-quarter 2020, reflecting year-over-year growth of 4%. Nevertheless, the top line figure lagged the Zacks Consensus Estimate of $468 million.
Clearwater Paper Corporation Price, Consensus and EPS Surprise
Clearwater Paper Corporation price-consensus-eps-surprise-chart
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Clearwater Paper Corporation Quote
Cost of sales was $376 million, down 2% year over year. Gross profit surged 49.5% year over year to $376 million. Gross margin was 16.9% in the reported quarter compared with 11.8% in the prior-year quarter.
Selling, general and administrative expenditure increased 13% to $32.6 million from the year-ago quarter. Adjusted EBITDA was $71.6 million in the reported quarter, reflecting an improvement of 39% from $51.7 million in the prior-year quarter. Adjusted EBITDA margin was 15.8% compared with 11.9% in the year-ago quarter.
Segment Performance
Consumer Products:
Net sales improved 6% year over year to $244 million. Adjusted EBITDA was $44 million in the reported quarter compared with $20 million in the prior-year quarter.
Pulp and Paperboard:
Net sales inched up 2% year over year to $209 million from the prior-year quarter. The segment reported adjusted EBITDA of $43 million, which declined 2.5% year over year.
Financial Position
Clearwater Paper’s cash and cash equivalents were $35.9 million at the end of 2020 compared with $20 million at the end of 2019. Operating cash flow was $247 million in 2020, marking a significant improvement compared with $55.6 million in the prior year. The company’s long-term debt was $716 million as of Dec 31, 2020, down from $884 million as of Dec 31, 2019.
2020 Results
Clearwater Paper’s adjusted earnings per share in 2020 was $5.30, a significant improvement from the prior-year’s figure of 23 cents. However, the bottom line missed the Zacks Consensus Estimate of $5.44. Including one-time items, the company delivered an earnings per share of $4.61 in 2020 against a loss per share of 34 cents in 2019. Sales rose 6% year over year to $1.87 billion but missed the Zacks Consensus Estimate of $1.88 billion.
Outlook
In first-quarter 2021, the company expects demand for tissue products to be volatile due to COVID-19. It will also be lower year over year as the pandemic buying of tissue had soared in first-quarter 2020 as the crisis spread. The company also anticipates some inflationary headwinds, notably in market pulp pricing.
Share Price Performance
Over the past year, Clearwater Paper has gained 43.7% compared with the
industry
’s rally of 45.3%.
Zacks Rank & Stocks to Consider
Clearwater Paper currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks worth considering in the basic materials space include
Impala Platinum Holdings Limited
IMPUY
,
Fortescue Metals Group Limited
FSUGY
and
BHP Group
BHP
. All of these stocks sport a Zacks Rank #1 (Strong Buy). You can see
the complete list of today’s Zacks #1 Rank stocks here
.
Impala Platinum has an expected earnings growth rate of 195.9% for the current fiscal. The company’s shares have rallied 84% in the past year.
Fortescue has a projected earnings growth rate of 84.3% for the current fiscal. The company’s shares have soared 182% in a year.
BHP Group has a projected earnings growth rate of 65.6% for the current fiscal year. The company’s shares have appreciated 75% in a year.
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