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Packaging Corp (PKG) Q1 Earnings & Sales Top Estimates, Up Y/Y
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Packaging Corporation of America (PKG - Free Report) reported adjusted earnings per share (EPS) of $2.72 in first-quarter 2022, beating the Zacks Consensus Estimate of $2.53. The bottom line increased 54% year over year.
The upside was primarily driven by higher volume, price and mix in the Packaging and Paper segments, improvement in operating cost and favorable weather conditions.
Including one-time items, earnings in the reported quarter were $2.70 per share compared with the prior-year quarter’s $1.75 per share.
Operational Update
Sales in the first quarter rose 18% year over year to $2,136 million. The top line surpassed the Zacks Consensus Estimate of $2,066 million.
The cost of products sold was up 14% year over year to $1,603 million in the first quarter. The gross profit surged 32% year over year to $533 million. Selling, general and administrative expenses amounted to $161 million compared with the prior-year quarter’s $145 million. The adjusted total segment operating income climbed 54% year over year to $342 million.
Packaging Corporation of America Price, Consensus and EPS Surprise
Packaging: Sales in the segment increased 21% year over year to $1,965 million in the first quarter of 2022. The segment’s adjusted operating profit amounted to $363 million in the reported quarter compared with $260 million in the prior-year quarter.
Paper: The segment’s revenues came in at $154 million in the January-March quarter, down 6.7% year over year. The segment reported an adjusted operating profit of $23.7 million compared with the year-ago quarter’s $9.8 million.
Cash Position
Packaging Corp had a cash balance of $778 million at the end of the first quarter, down from $1,133 million of cash held at the end of the prior-year quarter.
Outlook
Packaging Corp projects second-quarter 2022 EPS to be around $2.83. The company’s Packaging segment will continue to benefit from strong demand. PKG will continue to implement previously-announced price hikes across both the segments. Scheduled outage costs at the International Falls mill will likely dent the Paper segment’s sales volume in the second quarter. Management expects that the freight and logistics expenses, operating costs and recycled fiber prices will likely be slightly lower in the second quarter.
Price Performance
Packaging Corp’s shares have gained 12.1% in the past year compared with the industry’s growth of 3.1%.
Some better-ranked stocks in the Industrial Products sector are Alcoa (AA - Free Report) , Sonoco Products Company (SON - Free Report) and Greif Inc. (GEF - Free Report) . While AA and SON flaunt a Zacks Rank #1, GEF carries a Zacks Rank #2 (Buy).
Alcoa has a projected earnings growth rate of 107% for the current year. The Zacks Consensus Estimate for 2022 earnings has moved north by 76% in the past 60 days.
Alcoa delivered a trailing four-quarter earnings surprise of 17.4% on average. Alcoa’s shares have surged 81% in the past year.
Sonoco has an expected earnings growth rate of 47.6% for 2022. The Zacks Consensus Estimate for the current year’s earnings has moved up 13% in the past 60 days.
SON has a trailing four-quarter earnings surprise of 1.85%, on average. SON’s shares have declined 4.5% in the past year.
Greif has an estimated earnings growth rate of 16% for fiscal 2022. In the past 60 days, the Zacks Consensus Estimate for current-year earnings has been revised upward by 4.2%.
GEF pulled off a trailing four-quarter earnings surprise of 14.7%, on average. The company’s shares have appreciated 5% in a year’s time.
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Packaging Corp (PKG) Q1 Earnings & Sales Top Estimates, Up Y/Y
Packaging Corporation of America (PKG - Free Report) reported adjusted earnings per share (EPS) of $2.72 in first-quarter 2022, beating the Zacks Consensus Estimate of $2.53. The bottom line increased 54% year over year.
The upside was primarily driven by higher volume, price and mix in the Packaging and Paper segments, improvement in operating cost and favorable weather conditions.
Including one-time items, earnings in the reported quarter were $2.70 per share compared with the prior-year quarter’s $1.75 per share.
Operational Update
Sales in the first quarter rose 18% year over year to $2,136 million. The top line surpassed the Zacks Consensus Estimate of $2,066 million.
The cost of products sold was up 14% year over year to $1,603 million in the first quarter. The gross profit surged 32% year over year to $533 million. Selling, general and administrative expenses amounted to $161 million compared with the prior-year quarter’s $145 million. The adjusted total segment operating income climbed 54% year over year to $342 million.
Packaging Corporation of America Price, Consensus and EPS Surprise
Packaging Corporation of America price-consensus-eps-surprise-chart | Packaging Corporation of America Quote
Segmental Performance
Packaging: Sales in the segment increased 21% year over year to $1,965 million in the first quarter of 2022. The segment’s adjusted operating profit amounted to $363 million in the reported quarter compared with $260 million in the prior-year quarter.
Paper: The segment’s revenues came in at $154 million in the January-March quarter, down 6.7% year over year. The segment reported an adjusted operating profit of $23.7 million compared with the year-ago quarter’s $9.8 million.
Cash Position
Packaging Corp had a cash balance of $778 million at the end of the first quarter, down from $1,133 million of cash held at the end of the prior-year quarter.
Outlook
Packaging Corp projects second-quarter 2022 EPS to be around $2.83. The company’s Packaging segment will continue to benefit from strong demand. PKG will continue to implement previously-announced price hikes across both the segments. Scheduled outage costs at the International Falls mill will likely dent the Paper segment’s sales volume in the second quarter. Management expects that the freight and logistics expenses, operating costs and recycled fiber prices will likely be slightly lower in the second quarter.
Price Performance
Packaging Corp’s shares have gained 12.1% in the past year compared with the industry’s growth of 3.1%.
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Zacks Rank and Other Stocks to Consider
Packaging Corporation currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Some better-ranked stocks in the Industrial Products sector are Alcoa (AA - Free Report) , Sonoco Products Company (SON - Free Report) and Greif Inc. (GEF - Free Report) . While AA and SON flaunt a Zacks Rank #1, GEF carries a Zacks Rank #2 (Buy).
Alcoa has a projected earnings growth rate of 107% for the current year. The Zacks Consensus Estimate for 2022 earnings has moved north by 76% in the past 60 days.
Alcoa delivered a trailing four-quarter earnings surprise of 17.4% on average. Alcoa’s shares have surged 81% in the past year.
Sonoco has an expected earnings growth rate of 47.6% for 2022. The Zacks Consensus Estimate for the current year’s earnings has moved up 13% in the past 60 days.
SON has a trailing four-quarter earnings surprise of 1.85%, on average. SON’s shares have declined 4.5% in the past year.
Greif has an estimated earnings growth rate of 16% for fiscal 2022. In the past 60 days, the Zacks Consensus Estimate for current-year earnings has been revised upward by 4.2%.
GEF pulled off a trailing four-quarter earnings surprise of 14.7%, on average. The company’s shares have appreciated 5% in a year’s time.