- Packaging Corp’s 1Q adjusted EPS beats expectations at $1.72, compared to an estimated $1.68.
- Total net sales increased by 0.2% year-over-year to $1.98 billion, exceeding the estimate of $1.91 billion.
- Despite a 0.6% year-over-year decrease, packaging segment sales reached $1.80 billion, surpassing an estimated $1.75 billion.
- Paper segment sales demonstrated significant growth, increasing 8.5% year-over-year to $163.8 million, which exceeded the estimated $149.2 million.
- Ebitda excluding items reached $333.2 million, a decline of 18% from last year, and fell short of the estimated $345.2 million.
- Packaging adjusted EBITDA was also down 17% year-over-year at $326.2 million, lower than the estimated $335 million.
- Similarly, paper adjusted EBITDA declined 1% year-over-year to $40.6 million, but this still surpassed the estimated $36.7 million.
- Depreciation, amortization, and depletion totaled $128.4 million, down 0.9% year-over-year.
- The company forecasts a second quarter EPS of $2.07.
- According to company comments, while prices and mix in the Packaging segment were slightly higher than Q4 2023 levels, they were lower than anticipated due to the total announced increase not being fully reflected in the published benchmark prices.
- Operating and converting costs were driven lower by strong volume in both segments and a continued focus on cost management and process efficiencies.
- In addition, prices and mix are forecasted to increase due to announced price increases, increased domestic index prices, and higher export prices.
- Despite robust orders in the Paper segment, volume is expected to be lower due to scheduled maintenance outage at the International Falls, MN mill.
- Investment analysts consider the company as mixed bag with 3 buys, 5 holds, and 2 sells.
Packaging Corporation of America on Smartkarma
Analyst coverage of Packaging Corporation of America on Smartkarma reveals insightful findings from Baptista Research. In the report titled “Packaging Corporation of America: Uncovering the Strategy That Defied Market Expectations! – Major Drivers,” the analysis indicates a mixed performance in the recent quarter. While the company fell short of revenue expectations, it exceeded analyst consensus in earnings, showcasing resilience amidst market challenges. Packaging Corporation of America reported a third-quarter net income of $183 million, reflecting a decline from the previous year. The management’s strategic cost-effective measures, such as idling the Wallula mill to manage containerboard supply and demand, resulted in market-related downtime of around 174,000 tonnes, highlighting proactive decision-making.
A look at Packaging Corporation of America Smart Scores
| Factor | Score | Magnitude |
|---|---|---|
| Value | 2 | |
| Dividend | 3 | |
| Growth | 4 | |
| Resilience | 3 | |
| Momentum | 5 | |
| OVERALL SMART SCORE | 3.4 |
Smart Score is a compound score for the Company indicating its overall outlook. It is derived by taking an equally weighted average of underlying Factor scores computed by Smartkarma
Packaging Corporation of America, a company specializing in manufacturing containerboard and corrugated packaging products, appears to have a promising long-term outlook based on its Smartkarma Smart Scores. With a strong Momentum score of 5, the company is showing robust growth potential and market momentum, signaling positive future performance. Additionally, Packaging Corporation of America scores well in Growth, indicating favorable prospects for expansion and development in the foreseeable future. These factors combined suggest a positive trajectory for the company in the long run.
Furthermore, while Packaging Corporation of America scores moderately in Value, Dividend, and Resilience, with scores of 2, 3, and 3 respectively, the overall outlook for the company remains positive. The company’s focus on producing a variety of packaging products for different industries, including multi-color boxes, displays, and specialized boxes for the agricultural sector, positions it well for continued growth and resilience in the market. Investors may find Packaging Corporation of America an attractive long-term investment option based on its favorable Smart Scores and diverse product offerings.
Disclaimer: This article by Smartkarma is general in nature and based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Note that our articles may not factor in the latest price-sensitive company announcements or qualitative material.
While all reasonable care has been taken in the preparation, Smartkarma makes no assurance about the accuracy of any generated data or content. All content is indicative only and should be independently checked for accuracy and confirmed before use. Smartkarma accepts no responsibility for any loss or damage caused as a result of any inaccuracy or error within the Lab online tools or generated data.
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