WestRock Company WRK is scheduled to report second-quarter fiscal 2023 results (ended Mar 31, 2023) on May 4, before the opening bell.
Q2 Estimates
The Zacks Consensus Estimate for fiscal second-quarter revenues is pegged at $5.29 billion, suggesting a fall of 1.7% from the year-ago quarter's reported figure. The same for earnings per share is pegged at 51 cents, indicating a year-over-year decline of 56.4%. The Zacks Consensus Estimate for the company’s fiscal second-quarter earnings has moved down 7.3% in the past 60 days.
Q1 Performance
In the last reported quarter, WestRock delivered a year-over-year decline in adjusted earnings per share and revenues. The top and bottom lines missed the Zacks Consensus Estimates. WRK’s earnings have surpassed the Zacks Consensus Estimate in three of the last four trailing quarters, delivering an earnings surprise of 3.1%, on average.
WestRock Company Price and EPS Surprise
WestRock Company price-eps-surprise | WestRock Company Quote
Key Factors to Note
WestRock witnessed a slowdown in volumes in the corrugated packaging segment as customers have been rebalancing their inventory and purchasing has been muted due to weak economic conditions. This is expected to get reflected in the company’s top-line results in the second quarter of fiscal 2023.
Wholesome costs were expected to have been favorable sequentially (natural gas and recycled fiber), and higher freight, wage and chemicals costs are likely to have hurt its margins. Labor shortages and supply-chain issues have also been disrupting production, and impacting WRK’s shipments to customers.
Unfavorable non-cash pension expenses due to higher interest rates and market volatility are also expected to have impacted its profits in the fiscal second quarter. The company’s results will also reflect the impacts of four fewer shipping days.
Pricing actions and productivity initiatives undertaken by the company are expected to have negated some of these headwinds. WestRock is likely to have benefitted from solid demand for corrugated packaging, containerboard, food and beverage consumer packaging, and industrial packaging.
Segmental Projections
The Zacks Consensus Estimate for WRK’s Consumer Packaging segment’s quarterly revenues is pegged at $1,389 million, suggesting growth of 11.3% from the prior-year period's reported figure. The segment’s adjusted EBITDA is estimated to be $127 million, indicating a year-over-year fall of 38.4%.
For the Corrugated Packaging segment’s revenues, the Zacks Consensus Estimate is pinned at $2,428 million, implying growth of 4.7% from the year-ago quarter's reported number. The segment’s adjusted EBITDA is projected at $119 million, indicating a 63.8% year-over-year fall.
The revenue estimate for the Paper segment is pegged at $1,231 million, suggesting a decline of 20% from the prior-year reported figure. The same for the Distribution segment is pinned at $326 million, indicating a 9.4% year-over-year fall.