In This Article:
Packaging Corporation of America PKG reported adjusted earnings per share (EPS) of $2.31 in the first quarter of 2025, beating the Zacks Consensus Estimate of $2.21. The bottom line increased 34% year over year. The figure was above the company’s guidance of $2.21.
The upside primarily resulted from higher prices and mix in the Packaging and Paper segments and volumes in the Packaging segment (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Including one-time items, earnings in the reported quarter were $2.26 per share compared with the prior-year quarter’s $1.63.
Packaging Corporation of America Price, Consensus and EPS Surprise
Packaging Corporation of America price-consensus-eps-surprise-chart | Packaging Corporation of America Quote
Packaging Corp’s Sales & Margins Improve Y/Y in Q1
Sales in the first quarter rose 8.2% year over year to $2.141 billion. The top line surpassed the Zacks Consensus Estimate of $2.140 billion.
The cost of products sold moved up 4.8% year over year to $1.69 billion in the first quarter. The gross profit rose 22.8% year over year to $455 million. The gross margin came in at 21.2% up from prior year quarter’s 18.7%.
Selling, general and administrative expenses amounted to $161 million compared with the prior-year quarter’s $152 million. The adjusted operating income grew 38.7% year over year to $286 million.
PKG’s Q1 Segmental Performances
Packaging: Sales in this segment increased 9.6% year over year to $1.97 billion in the first quarter of 2025. In the Packaging segment, total corrugated product shipments per day rose 2.5% year over year.
We anticipated a year-over-year volume increase of 5.2% and a favorable price and mix impact of 3.6%.Containerboard production was 1,250,000 tons for the quarter, lower than our expectation of 1,311,960 tons. Containerboard inventory grew 75,000 tons year over year and moved down 3,000 tons sequentially.
Adjusted operating profit was $284 million, a 36.7% rise from $208 million in the prior-year quarter.
Paper: The segment’s sales were $154 million in the January-March quarter, down 5.9% year over year. The segment’s sales volume fell 7% year over year and 2% sequentially.
We expected a pricing/mix benefit of 2.1% in the first quarter. Volume was expected to be a positive 2.7%.
The Paper segment reported an adjusted operating profit of $35.6 million, a dip from the year-ago quarter’s $36.1 million.
Packaging Corp’s Cash Flow Updates
Packaging Corp had a cash balance of $0.91 billion at the end of the first quarter, down from $1.25 billion of cash held at the end of the prior-year quarter.