Earnings Alerts

Packaging Corporation of America (PKG) Earnings Miss Forecast with Q4 Highlights and Future Outlook

By January 29, 2025 No Comments
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  • Packaging Corp’s first-quarter EPS forecast fell short of estimates, with an expected EPS of $2.21 compared to the estimate of $2.38.
  • For the fourth quarter, adjusted EPS was slightly lower than expected at $2.47, compared to the estimate of $2.52.
  • Actual EPS for the fourth quarter was $2.45, showing growth from $2.10 year-over-year (y/y).
  • Net sales for the fourth quarter were reported at $2.15 billion, an 11% increase y/y, slightly above the estimated $2.13 billion.
  • The packaging segment experienced sales of $1.98 billion, an 11% rise y/y, slightly exceeding the estimate of $1.97 billion.
  • Paper segment sales came in at $151.5 million, up 5.4% y/y, surpassing the estimated $144.4 million.
  • EBITDA, excluding items, was $439.3 million, a 12% increase y/y, though below the expected $448.9 million.
  • In the packaging segment, adjusted EBITDA was $425.7 million, up 11% y/y, but lower than the forecasted $446.3 million.
  • The paper segment reported an adjusted EBITDA of $39.3 million, showing a 12% increase y/y, which slightly beat the estimate of $39.1 million.
  • Depreciation, amortization, and depletion costs were $136.0 million, up 4% y/y, over the estimated $133.1 million.
  • The company anticipates price inflation in various costs, excluding recycled fiber, due to increased operating and converting costs, along with higher mill operations costs.
  • Rising costs of wood, energy, and chemicals are expected due to the impact of cold seasonal weather.
  • Labor and benefits costs are predicted to increase because of annual adjustments, the resumption of payroll taxes, and share-based compensation expenses.
  • Market analyst recommendations include 6 buys, 3 holds, and 1 sell.

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Packaging Corporation of America on Smartkarma

Analyst coverage of Packaging Corporation of America on Smartkarma has been positive, with insights provided by Baptista Research. In the report “Packaging Corporation of America: What Is The Expected Margin Impact Of Its Strategic Investments To Enhance Operational Efficiency?- Major Drivers,” it was highlighted that the company showcased notable growth in revenue and profitability in the third quarter of 2024. With increased volume and effective cost management, Packaging Corporation of America reported a significant improvement in net income, reaching $238 million translating to $2.64 per share.

Another report from Baptista Research titled “Packaging Corporation of America: These Are The 5 Most Pivotal Factors Driving Its Performance In 2024 & Beyond! – Financial Forecasts” discussed the second-quarter 2024 financial results of PCA, noting both strengths and challenges. Despite a slight decrease in EPS to $2.20 from $2.31 compared to the previous year, the company announced a net income of $199 million. These insights indicate a comprehensive analysis of PCA’s financial performance and strategic investments by top independent analysts on Smartkarma.


A look at Packaging Corporation of America Smart Scores

FactorScoreMagnitude
Value2
Dividend3
Growth3
Resilience3
Momentum4
OVERALL SMART SCORE3.0

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

Based on the Smartkarma Smart Scores for Packaging Corporation of America, the company seems to have a moderate overall outlook. With a Value score of 2, it indicates that the company may not be considered extremely undervalued in the market. However, the company scores a respectable 3 in both Dividend and Growth categories, suggesting a stable dividend payout and potential for growth. In terms of Resilience, the company also scores a 3, indicating a decent ability to withstand economic downturns. Additionally, with a Momentum score of 4, Packaging Corporation of America seems to have positive price momentum in the market.

Packaging Corporation of America manufactures containerboard and corrugated packaging products for various industries, including multi-color boxes, displays, meat boxes, and wax-coated boxes for the agricultural sector. Overall, while the company’s Smart Scores reflect a mix of strengths and areas for potential improvement, Packaging Corporation of America appears to have a solid foundation to navigate the market in the long term.


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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