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Veritiv Corporation VRTV is scheduled to report fourth-quarter 2022 results, before the opening bell on Feb 28.
Q4 Estimates
The Zacks Consensus Estimate for Veritiv’s fourth-quarter earnings is pegged at $5.44, indicating growth of 48.2% from the year-ago quarter's reported figure. Earnings estimates have been unchanged over the past 30 days.
Q3 Performance
Veritiv reported year-over-year improvement in both revenues and earnings per share in the third quarter of 2022. Earnings in the quarter beat the Zacks Consensus Estimate. VRTV has surpassed the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average surprise being 31.3%.
Veritiv Corporation Price and EPS Surprise
Veritiv Corporation price-eps-surprise | Veritiv Corporation Quote
Factors to Note
Veritiv has been witnessing strong organic sales growth, driven by a combination of above-market corrugated volume performance in the U.S. corrugated and flexible Packaging businesses, and the company’s growth-oriented initiatives within key industry verticals. This momentum has helped the company offset the impacts of lost sales from the divestiture of the Veritiv Canada business. This is likely to get reflected in its fourth-quarter results.
The company’s pricing actions have helped offset the impacts of inflationary market price increases, primarily in the Packaging and Print Solutions product portfolios. Also, despite ongoing constraints in the broader supply chain, Veritiv has been able to mitigate some of the impacts on its customers by leveraging its portfolio of suppliers and its North America supply-chain network. These efforts, combined with the company’s initiatives to improve commercial and operational efficiency, are expected to have aided its margins in the fourth quarter.
The Packaging segment has been benefiting from higher market prices and increased sales volume in all product categories and end-use sectors. Sales to manufacturing, healthcare, and food and beverage customers have shown improvement over the past few quarters. However, the lost volume associated with the divestiture of the Canada business is expected to have offset some of the gains.
In the Facility Solutions segment, the loss in net sales due to the divestiture of the Canada business is expected to have been offset by increased sales of towels and tissues, food service products, and can liners in the fourth quarter of 2022. Demand picked up in the entertainment and hospitality end-use sectors in 2022, as the away-from-home activity resumed following the Covid-related closures. This has been partially offset by weak demand for the personal protective equipment product category, which had experienced strong demand in 2021 due to COVID-19. Growth in the broader facility solutions away-from-home sectors is likely to have been offset by lower demand for personal protective equipment products through the fourth quarter of 2022.
The Print Solutions segment has seen higher market prices, driven by demand outpacing supply. This is likely to have been offset by decreased sales volume, as well as volume declines associated with the divestiture of the Canada business.
