ATLANTA - WestRock Company (NYSE:WRK), a leader in sustainable paper and packaging solutions, reported second-quarter earnings that surpassed analyst expectations, sending its shares up nearly 5%.
The company announced a second-quarter adjusted EPS of $0.39, which was $0.15 higher than the analyst consensus of $0.24. However, revenue for the quarter was slightly below expectations at $4.73 billion, compared to the estimated $4.75 billion.
The company's second-quarter performance demonstrated resilience despite a challenging market environment. Net sales declined by 10.4% YoY, primarily due to lower selling price/mix across its segments. Despite this, WestRock achieved over $160 million in cost savings during the quarter and expects to significantly exceed its fiscal 2024 target of $300 to $400 million in savings.
CEO David B. Sewell commented on the results, stating, "I’m proud of our team’s continued focus and execution, as we delivered strong results and made significant progress on our cost savings initiatives." He added that the company's efforts are positioning it to compete effectively in the market and drive long-term earnings growth.
The decline in net sales compared to the same quarter last year was driven by decreases across all segments, with Corrugated Packaging (NYSE:PKG), Global Paper, and Consumer Packaging experiencing declines due to lower selling price/mix and softer volumes. The company's net income for the quarter stood at $16 million, including $81 million of restructuring and other costs, net.
Adjusted EBITDA for the second quarter was $618 million, a decrease of 21.6% YoY, reflecting lower adjusted EBITDA across all segments. Despite the decrease in net sales and adjusted EBITDA, the company's focus on cost savings and efficiency improvements has helped mitigate the impact of the challenging market conditions.
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