WestRock misses sales estimates as weak consumer spending hurt containerboard demand

(Reuters) - WestRock reported its first-quarter sales on Thursday that fell short of market expectations, as the company grapples with weakening consumer demand for its containerboards and paperboard products.

The demand for corrugated containers and containerboard, which are crucial for packing items like food, beverages and medicines, took a hit from consumers pulling back on non-essential spending.

This led to retailers destocking packaging boxes and reducing orders for these products, impacting paper packaging companies such as WestRock, Packaging Corp of America and International Paper.

WestRock's revenue fell 6.2% to $4.6 billion in the quarter ended Dec. 31, missing analysts' estimates of $4.8 billion, as per LSEG data.

A shift to in-store purchases from pandemic-driven online shopping has also impacted the sector.

Revenue from the company's corrugated packaging segment rose 2.41%, while the global paper unit saw an 18.3% fall in sales, impacted by prior year mill and interior partition divestitures.

The paper packager, which is in the process of being bought by Irish counterpart Smurfit Kappa in an $11 billion deal subject to shareholder and regulatory approval, posted an adjusted profit of 20 cents per share, missing estimates of 35 cents per share, according to LSEG data.

"Although there were external containerboard shipments, there was a lower paperboard market demand," CEO David Sewell said.

The company's shares fell 1% in premarket trading.

(This story has been corrected to say WestRock is in the process of being bought by Smurfit Kappa, and not bought already, in paragraph 6)

(Reporting by Annett Mary Manoj in Bengaluru; Editing by Shweta Agarwal)