Smurfit Westrock Plc SW has reported earnings of 28 cents per share in fourth-quarter 2024 compared with 19 cents in the year-ago quarter. Adjusted for non-recurring costs, earnings came in at 34 cents, which missed the Zacks Consensus Estimate of earnings of 68 cents. 

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Smurfit Westrock was formed by the merger of two major paper and packaging industry players, Smurfit Kappa and WestRock, on July 5, 2024. Results for Smurfit Westrock are being reported from the third quarter of 2024 as a unified company.

Smurfit Westrock’s Q4 Sales Surge Y/Y

The company’s net sales skyrocketed 163.4% year over year to $7.54 billion, aided by the positive impacts of acquisitions and growth in corrugated volumes. The top line lagged the Zacks Consensus Estimate of $7.80 billion.
The reported cost of sales soared 182.1% to $6.1 billion from the year-ago period. The gross profit surged 105.7% year over year to $1.44 billion. The adjusted EBITDA was $1.17 billion, skyrocketing 161% from the year-ago quarter. The adjusted EBITDA margin was 15.5%, lower than 15.6% in the year-ago quarter.

SW’s Q4 Segmental Performances

The company operates under three reportable segments.

Europe, MEA & APAC: This segment includes operations in Europe, the Middle East and Africa, and the Asia Pacific. Sales for the Europe, MEA and APAC segment were $2.52 billion, up 17.4% year over year. The segment’s adjusted EBITDA was up 4.8% year over year at $371 million.

North America: This segment includes operations in the United States, Canada and Mexico. Sales for the North America segment were $4.59 billion, a significant increase from the year-ago period’s $0.38 billion. The segment’s adjusted EBITDA surged to $710 million from the year-ago quarter’s $72 million.

LATAM: This segment includes operations in Central America and the Caribbean, Argentina, Brazil, Chile, Colombia, Ecuador, and Peru. Sales for this segment were $524 million, up 52.8% year over year. The segment’s adjusted EBITDA skyrocketed 112.8% year over year at $121 million.

Smurfit Westrock’s Cash Position & Balance Sheet Updates

SW had cash and cash equivalents (including restricted cash) of $0.86 million at the end of 2024 compared with $1 billion as of the end of 2023.

Net cash provided by operating activities was $781 million compared with $611 million in the year-ago quarter. At the end of Dec. 31, 2024, the adjusted free cash flow was $257 million compared with $391 million in the year-ago. 

The company had previously announced a quarterly dividend of 43.08 cents per share.

SW’s 2024 Performance

SW has reported adjusted earnings of 74 cents per share in 2024, which missed the Zacks Consensus Estimate of earnings of $2.66. Smurfit Westrock had posted earnings of $3.30 in the year-ago quarter.

The company’s net sales surged 74.6% year over year to $21.11 billion. The top line lagged the Zacks Consensus Estimate of $30.90 billion. 

The company reported 2024 adjusted EBITDA of $4.7 billion, which came in line with its guidance.

Smurfit Westrock Stock’s Price Performance

Shares of the company have gained 34.7% in the past six months compared with the industry’s 34.2% growth.

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SW Stock’s Zacks Rank

The company currently has a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Smurfit Westrock’s Peer Performance

International Paper Company IP reported an adjusted loss of two cents per share in the fourth quarter of 2024, which beat the Zacks Consensus Estimate of a loss of 7 cents per share. This compares with the company’s restated adjusted loss of 51 cents per share for the year-ago quarter.

International Paper witnessed lower volumes, higher input, and operation costs and maintenance outage costs, which were offset by an improved price mix. Earnings in the quarter also included a 46-cent benefit from accelerated depreciation related to strategic mill actions.

International Paper reported net sales of $4.58 billion, down 0.5% from the year-ago quarter, as lower volumes were offset by higher prices. The top line missed the Zacks Consensus Estimate of $4.7 billion.

Packaging Corporation of America PKG posted adjusted earnings per share of $2.47 in the fourth quarter of 2024, which missed the Zacks Consensus Estimate of $2.51. The bottom line increased 16% year over year. The upside was driven by higher prices and mix, and improved volume in both segments, as well as lower freight and logistics expenses. However, these gains were somewhat offset by an increase in operating expenses, scheduled maintenance outage expenses, depreciation expenses and other expenses.

PKG’s sales rose 10.7% year over year to $2.15 billion due to higher volumes and price/mix in both segments. The top line beat the Zacks Consensus Estimate of $2.13 billion.

Paper & Related Product Stocks Awaiting Results

Rayonier Advanced Materials RYAM, expected to release fourth-quarter 2024 results soon, has a trailing four-quarter average surprise of 9.5%. The Zacks Consensus Estimate for RYAM’s earnings is pegged at a loss of 12 cents per share. This indicates an improved performance from the loss of 22 cents per share in the fourth quarter of 2023. 

The consensus estimate for the RYAM’s top line is pegged at $436 million, indicating 3% growth from the prior-year reported figure.

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