WestRock's (WRK) Q1 Earnings Beats, Revenues Lag

WestRock CompanyWRK was formed from the merger of MeadWestvaco Company and Rock-Tenn Company on Jul 1, 2015. Headquartered in Norcross, GA, the company aspires to be the premier partner and unrivalled provider of paper and packaging solutions in consumer and corrugated markets.

In line with its constant strategic focus on aligning its portfolio and resources around its core paper and packaging solutions businesses, WestRock has agreed to sell its Home, Health and Beauty business to Silgan Holdings, Inc. SLGN . WestRock expects to receive net proceeds $1 billion from the sale. Earlier, the company divested its specialty chemicals business, Ingevity to better position the company to pursue its operating priorities and strategies.

WestRock will also benefit from the synergies from the merger, acquisitions and further share repurchases. Moreover, the company stands to benefit from its investments in capacity, growth initiatives, joint venture with Grupo Gondi in Mexico and a shareholder-friendly capital allocation strategy. However, unfavorable foreign currency translation, merger related costs remain a concern.

Let's have a quick look at the first-quarter fiscal 2017 earnings release of the company.

Estimate Trend & Surprise History

Investors should note that the earnings estimate for WestRock for the fiscal first quarter 2017 has moved south over the past month. The Zacks Consensus Estimate for the quarter has gone down 15% over the past 30 days and currently stands at 45 cents. Coming to the earnings surprise, WestRock posted a positive average earnings surprise of 9.73% in the last four trailing quarters.

Westrock Company Price and EPS Surprise

Westrock Company Price and EPS Surprise | Westrock Company Quote


WestRock posted adjusted earnings of 47 cents per share in the first-quarter fiscal 2017, ahead of the Zacks Consensus Estimate of 45 cents. Investors should note that these figures take out special items.


WestRock posted revenues of $3,447 million in the reported quarter, falling short of the Zacks Consensus Estimate of $3,479 million.

Key Developments

WestRock stated that is has achieved $85 million in year-over-year productivity improvements and annual run rate of $580 million of synergy and performance improvements.

WestRock also announced that it will acquire Multi Packaging Solutions International Limited MPSX , a global leader in value-added print and packaging solutions for the branded consumer, healthcare, and multi-media markets for $18 per share.

Zacks Rank

Currently, WestRock has a Zacks Rank #3 (Hold), but that could change following WestRock's earnings report which was just released.

Market Reaction

WestRock's shares were inactive following the release. It would be interesting to see how the market reacts to the results during the trading session today.

Check back later for our full write up on this WestRock's earnings report later!

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Silgan Holdings Inc. (SLGN): Free Stock Analysis Report

Multi Packaging Solutions International Limited (MPSX): Free Stock Analysis Report

Westrock Company (WRK): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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