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Key Takeaways
- Shares of packaging manufacturer Smurfit WestRock were among the S&P 500’s top performers on Wednesday.
- Third-quarter results fell short of estimates but reflected expenses related to the merger between Smurfit Kappa and WestRock, which closed in July.
- The WestRock acquisition and strong volumes in corrugated packaging helped the company more than double its net sales year-over-year.
Smurfit WestRock (SW) shares popped on Wednesday, marking one of the S&P 500’s top performances, after the packaging manufacturer released the first quarterly result to reflect the July merger of Ireland’s Smurfit Kappa and U.S.-based WestRock.
Given the timing of the transaction, the second-quarter 2024 report covered only the performance of Smurfit Kappa.
The stock, recently up nearly 13%, is now back in positive territory for the year.
Q3 Results Provide ‘Strong Foundation To Build Upon’
The cardboard box maker reported a third-quarter 2024 net loss of $150 million on net sales of approximately $7.7 billion. Both figures fell short of analysts’ consensus estimates.
Despite the lower-than-expected headline numbers, the top-line result more than doubled from net sales of roughly $2.9 billion posted in the year-ago period, boosted by contributions from the WestRock acquisition and strong volumes in corrugated packaging. The company attributed around $500 million of the quarterly loss to expenses and accounting adjustments related to the merger.
Smurfit WestRock reports results in three geographical segments. Although sales remained essentially flat year-over-year for the segment comprising Europe, the Middle East, Africa, and the Asia-Pacific region, the WestRock add-on contributed to a surge in sales for the North America segment. The Latin America segment posted sales growth of 48% from a year ago.
CEO Tony Smurfit stressed the impact of the merger on the company’s performance, asserting that “these results are a strong foundation to build upon.”