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
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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