Westrock Plunges On Q1 Earnings Miss, Scrapping Of FY23 Outlook

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  • Westrock Co WRK reported a first-quarter FY23 sales decline of 0.6% year-on-year to $4.92 billion, missing the consensus of $5.10 billion.
  • Corrugated Packaging segment revenue rose 0.7% Y/Y, Consumer Packaging segment increased 6.7%, and Global Paper segment decreased 16.9%.
  • Gross profit fell 3.9% Y/Y to $765.2 million with a gross margin of 15.5%.
  • Operating income for the quarter fell 37.8% to $168.2 million.
  • The company held $415.2 million in cash and equivalents as of Dec. 31, 2022. Cash provided by operating activities totaled $266 million.
  • Adjusted EBITDA of $652.1 million decreased 4.1% Y/Y.
  • Adjusted EPS of $0.55 missed the analyst consensus of $0.60.
  • "During the quarter, elevated inflation and softening macroeconomic conditions negatively impacted our Global Paper business,” said CEO David B. Sewell.
  • Outlook: Westrock removed its FY23 outlook citing uncertain macroeconomic conditions.
  • Price Action: WRK shares are trading lower by 14.65% at $33.49 on the last check Wednesday.
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