Westrock CEO Eyes Additional Cost Savings & Driving Profitable Growth: Details

Westrock Company WRK reported Q4 net sales of $4.98 billion, down 7.7% Y/Y, missing the analyst consensus of $5.11 billion.

Quarterly adjusted EPS of $0.81 beat the analyst consensus of $0.74.

The decline in net sales compared to the fourth quarter of fiscal 2022 was driven primarily by a $417 million, or 29.2%, decrease in Global Paper segment sales.

Consolidated Adjusted EBITDA slumped 20% Y/Y to $736 million, primarily due to lower Global Paper segment Adjusted EBITDA.

The company exceeded cost savings expectations in fiscal 2023 and exited fiscal 2023 with greater than $450 million in run-rate savings.

Q4 net income plunged 68.1% to $109.8 million primarily due to higher restructuring and other costs, net, lower selling price/mix, lower volumes excluding the Mexico Acquisition, the impact of increased economic downtime, increased non-cash pension costs, the prior year ransomware insurance recoveries, higher net interest expense, and business systems transformation costs.

In Q4, the company completed the previously announced sale of the interior partitions converting operations and the sale of the Chattanooga mill to its joint venture partner and received $318 million of proceeds, including a preliminary working capital adjustment and other customary adjustments, and recorded a pre-tax gain on sale of $239 million.

The company exited the quarter with cash and equivalents worth $393.4 million. Total debt was $8.6 billion at September 30, 2023, and adjusted net debt was $8.0 billion.

"As we turn to fiscal 2024, we remain committed to unlocking additional cost savings and driving profitable growth," said David B. Sewell, chief executive officer.

Price Action: WRK shares are trading higher by 2.40% to $38.33 on the last check Thursday.

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