(Reuters) -WestRock beat quarterly profit expectations on Thursday, banking on higher prices, easing input costs and a rebound in demand for its paper packaging products, sending its shares up 6.3% in early trading.
The company, which is being acquired by Ireland-based Smurfit Kappa for $11 billion, has redirected its focus toward bolstering its corrugated packaging portfolio and implemented cost-saving measures by shutting a few of its paper mills in the prior year.
Operating costs for materials such as chemicals, wood and recycled fiber have also eased from their highs.
The shift away from plastic packaging and the rise of online shopping have helped WestRock (NYSE:WRK) maintain high prices and combat steeper costs and inflation-strained consumer budgets.
Smurfit Kappa also posted first-quarter core profit higher than the final quarter of 2023, when it signaled a dip in demand for packaging.
On an adjusted basis, WestRock earned 39 cents per share, exceeding market expectations of 23 cents.
Still, its second-quarter revenue fell 10.4% to $4.73 billion, compared with analysts' estimates of $4.75 billion, according to LSEG data.