WestRock (WRK) Misses Q2 EPS by 1c, Slight Miss on Revenues

WestRock (NYSE: WRK) reported Q2 EPS of $0.83, $0.01 worse than the analyst estimate of $0.84. Revenue for the quarter came in at $4.02 billion versus the consensus estimate of $4.14 billion.

Second Quarter 2018 Highlights

• Earned $0.86 per diluted share and $0.83 of adjusted earnings per diluted share compared to $0.40 per diluted share and $0.54 of adjusted earnings per diluted share in the prior year quarter, up 115% and 54%, respectively.
• Segment EBITDA increased $122 million, or 22%, compared to the prior year quarter.
• Corrugated Packaging Segment EBITDA increased 39% compared to the prior year quarter. The segment delivered a Segment EBITDA margin of 18.9% and a North American Adjusted Segment EBITDA margin of 20.5%, up 410 and 460 basis points, respectively, compared to the prior year quarter.
• Pulp & Paper Week published North American price increases across all of WestRock’s major grades, including containerboard, SBS, CNK, CRB and URB.
• Achieved $64 million in year-over-year productivity and a run rate of $975 million of synergy and performance improvements since the creation of WestRock.
• The effective tax rate was 7.7%, including an income tax benefit of $31.5 million, or $0.12 per diluted share. This benefit was due to a refinement of the estimated impact on deferred tax balances related to the corporate tax rate reduction under the Tax Cuts and Jobs Act (as defined below). This benefit has been excluded from adjusted earnings per diluted share, and the adjusted tax rate on adjusted earnings per diluted share was 21.3%.
• Acquired substantially all of the assets of Plymouth Packaging, Inc. (“Plymouth”), including its “Box on Demand” systems that enhance our platform and drive differentiation and innovation. The systems produce packaging that is accurately sized for any product type according to customers’ specifications.
• Initiated integration planning for the planned acquisition of KapStone Paper and Packaging Corporation (“KapStone”), which is expected to close by the end of the September quarter or during the December quarter, subject to customary closing conditions.

For earnings history and earnings-related data on WestRock (WRK) click here.

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