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How Did WestRock’s 3Q16 Earnings Turn Out?

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Aug. 8 2016, Updated 3:52 p.m. ET

Price movement

WestRock (WRK) has a market cap of $11.0 billion. It rose by 4.2% to close at $43.72 per share on August 4, 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were 2.2%, 16.8%, and -2.1%, respectively, on the same day. WRK is trading 5.0% above its 20-day moving average, 8.9% above its 50-day moving average, and 7.3% above its 200-day moving average.

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Related ETF and peers

The iShares Global Timber & Forestry ETF (WOOD) invests 3.9% of its holdings in WestRock. The ETF tracks the 25 largest publicly listed companies that own or manage forests and timberlands. The YTD price movement of WOOD was 0.77% on August 4.

The market caps of WestRock’s competitors are as follows:

  • International Paper (IP) — $18.8 billion
  • Packaging Corporation of America (PKG) — $7.0 billion
  • Graphic Packaging Holding Company (GPK) — $4.3 billion

Performance of WestRock in fiscal 3Q16

WestRock reported fiscal 3Q16 net sales of $3.6 billion, a rise of 44.0% from the net sales of $2.5 billion in fiscal 3Q15. Sales from the corrugated packaging and consumer packaging segments rose by 4.3% and 137.0%, respectively, between fiscals 3Q15 and 3Q16. It reported sales of land and development of $42.0 million in fiscal 3Q16. It reported restructuring and other costs of $43.1 million in fiscal 3Q16, compared with $13.1 million in fiscal 3Q15. The company’s gross profit margin fell by 2.4% and its operating profit rose by 8.5% between fiscals 3Q15 and 3Q16.

Its net income and EPS (earnings per share) fell to $92.3 million and $0.36, respectively, in fiscal 3Q16, compared with $156.4 million and $1.10 in fiscal 3Q15. It reported adjusted EPS from continuing operations of $0.71 in fiscal 3Q16.

WRK’s cash and cash equivalents rose by 24.5% and its inventories fell by 4.0% between fiscals 3Q15 and 3Q16. Its current ratio fell to 1.7x, and its debt-to-equity ratio rose to 1.3x in fiscal 3Q16, compared with 1.9x and 1.2x, respectively, in fiscal 4Q15.

WestRock declared dividend

WestRock has declared a dividend of $0.38 per share on its common stock. The dividend will be paid on August 22, 2016, to shareholders of record at the close of business on August 12, 2016. In the next part of this series, we’ll take a look at Bemis’s dividend.

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