Veritiv Leaps on Fourth-Quarter Earnings Beat, Buyback Plan

Veritiv's sales were bolstered by its packaging segment, particularly in food processing delivery and specialty retail.
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Veritiv  (VRTV) - Get Report was soaring after the business equipment and supplies company reported better-than-expected fourth-quarter results and unveiled a $50 million stock repurchase program.

Shares of the Atlanta company at last check were up 41% to $35.53. The shares on Wednesday touched a 52-week high $45.50, up 81%. A little less than a year ago, the shares were trading as low as $5.70.

Veritiv reported net income of $32 million, or $1.90 a share, compared with $3.4 million, or 21 cents, in the year-earlier period. The FactSet consensus called for the company to report a loss of 73 cents a share.

Net sales totaled $1.64 billion, down 11% from a year ago. The FactSet consensus called for net sales of $1.56 billion.

The company also said its board had approved a $50 million stock buyback plan. The buyback replaces a $25 million plan the board approved last March.

"Despite the challenging market environment, the fundamentals of our business improved in a step-wise manner, driven by packaging segment growth and the execution of our multiyear strategy, including our broad-based efficiency programs," Chief Executive Sal Abbate said in a statement.

Net sales in packaging were up 4.3% in the quarter and core sales rose 4.1% compared with the prior year, bolstered by growth in food processing delivery and specialty retail.

The company said its restructuring plan was on schedule. Veritiv expects full-year 2021 revenue to be relatively flat compare with the prior year.

The company said that in the first half it expected revenue to be hurt by the impact of the COVID-19 pandemic across all segments except for packaging. Veritiv expects a broader economic rebound in the second half.

Veritiv said it expects full-year adjusted pretax earnings before interest, taxes, depreciation and amortization to range from $195 million to $205 million. Free cash flow in 2021 is expected to be at least $75 million.