WestRock (WRK) to Report Q2 Earnings: What's in the Cards?

WestRock Company WRK is put ought illustrate second-quarter fiscal 2019 results can Apr 30, ago the opening bell.

In the persist reported quarter, the company’s adjusted salary per piece declined 5% still revenues rose 11%. still salary hit the Zacks Consensus Estimate, revenues missed the same.

Notably, WestRock’s salary outpaced estimates at three of the trailing four flae still coming at rank once. The company has medium definite amaze of 2.90%.

Let’s cry on how things are shaping up previous ought this announcement.

WestRock company salary and EPS Surprise
 

WestRock company price-eps-surprise | WestRock company Quote

Factors at Play

WestRock is benefiting from favorable demand, salary and mingle trends across thesis and packaging businesses. at the first district of fiscal 2019, the company witnessed record box shipments, which rose 13.5% year can year. The legacy WestRock North American corrugated box shipments increased 3.1% year can year can a per-day basis, which created a record. The company witnessed higher growth compared with the industry because 20 consecutive months. This momentum is prone ought summary at the to-be-reported quarter.

The Zacks Consensus estimate because entire revenues is pegged at $4.6 billion because the fiscal first quarter, projecting year-over-year growth of 18%.

WestRock projects adjusted part EBITDA at the second district of fiscal 2019 ought exist amid $700 million and $735 million compared with $733 million reported at first-quarter fiscal 2019. The KapStone acquisition is prone ought further $45-$50 million at adjusted part EBITDA.

Pricing will prone exist higher by $10-$15 million at the Consumer Packaging part at the to-be-reported district because a originate of previously announced salary increases. However, maintenance downtime will exist 41,000 tons compared with 17,000 tons at the first district of fiscal 2019, which will prone dent results. The Zacks Consensus estimate because revenues because the Consumer Packaging part is pegged at $1,696 million because the fiscal second quarter, indicating year-over-year refuse of 6%. The Consumer Packaging segment’s adjusted EBITDA is anticipated ought refuse 13% year can year ought $212 million.

In the Corrugated Packaging segment, maintenance downtime will exist 88,000 tons at the second district of fiscal 2019 compared with 50,000 tons at the first district of fiscal 2019. at the Corrugated Packaging segment, the company ended up with almost 100,000 tons of excess containerboard inventory, following the KapStone acquisition. Thus, at the second district of fiscal 2019, it plans ought diminish inventories and competition produce with demand. The mill maintenance downtime and actions taken ought diminish inventory are prone ought collision salary at the second district of fiscal 2019.

The Zacks Consensus estimate because revenues because the Corrugated Packaging part is currently pegged at $2,988 million, reflecting year-over-year rise of 33%. in spite of the setbacks mentioned above, the Corrugated Packaging segment’s adjusted EBITDA is prone ought ripple 23% ought $521 million.

The clay & development part is expected ought illustrate revenues of $10.3 million at the district beneath review, down from $26.7 million at the prior-year quarter.

Wages and related taxes are expected ought exist sequentially higher by $45 million at the second district of fiscal 2019. Other input costs will exist moderately higher mainly due ought rising maiden fiber costs because a originate of the humid weather. Higher acquisition-related depreciation and amortization, and amuse expenses are prone ought lower salary by 19 cents per piece at the second district of fiscal 2019. impose worthy will too exist higher at 24.5% compared with 23.3% at first-quarter fiscal 2019.

The Zacks Consensus estimate because salary is pegged at 63 cents, indicating a year-over-year refuse of 24%.

salary Whispers

Our proven xerox does no foretell that WestRock is prone ought hit salary estimates this quarter. This is because a stock needs ought dine — a definite salary ESP and a Zacks grade #1 (Strong Buy), 2 (Buy) or 3 (Hold) — because this ought happen. That is no the instance here because you will cry on below.

Earnings ESP: The company’s salary ESP, which represents the distinction amid the Most precise estimate and the Zacks Consensus Estimate, is -2.38%. You can disclose the best stocks ought buy or sell ago they’re reported with our salary ESP Filter.

Zacks Rank: WestRock currently carries a Zacks grade #3. This combined with a negative ESP makes salary amaze prediction difficult.

We advise against stocks with a Zacks grade #4 or 5 (Sell-rated) going into the salary announcement, specially while the company is seeing negative estimate revisions.

Share salary Performance