Packaging Corp of America Reports Strong Q3 Results

(Reuters) – Packaging Corp of America (NYSE:PKG) reported a third-quarter profit and revenue exceeding Wall Street estimates on Tuesday, driven by price increases in its paper and packaging segments.

The Lake Forest, Illinois-based company makes packaging products for customers in industries such as food and beverages, paper products, and retail trade sectors.

Financial Highlights

• Packaging Corp's quarterly adjusted profit came in at $2.65 per share, surpassing average analysts' estimates of $2.50 per share, according to data compiled by LSEG.
• Total revenue for the third quarter ending September 30 rose nearly 13% to $2.18 billion, compared with estimates of $2.09 billion.

"Very strong demand throughout the quarter led to all-time quarterly records for container board production, total box shipments, and shipments per day," said CEO Mark Kowlzan.

Segment Performance

• Its packaging segment saw per day shipments rise 5.8% sequentially, with corrugated products shipments increasing 11.1% from a year ago.
• However, Kowlzan noted that total shipments for the corrugated business in the next quarter could be affected by two fewer shipping days and hurricane damage to the strawberry crops in Florida.
• He also indicated a sequential decline in shipments in the paper segment, although demand in the packaging segment is expected to remain strong.

Future Outlook

The company forecast fourth-quarter adjusted profits of $2.47 per share, slightly above the LSEG compiled mean of $2.46 per share.