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Packaging Corp. (PKG) Down 4.8% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Packaging Corp. (PKG - Free Report) . Shares have lost about 4.8% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Packaging Corp. due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Packaging Corp Q1 Earnings & Sales Top Estimates, Up Y/Y
Packaging Corp 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.
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. It 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.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
The consensus estimate has shifted 8.78% due to these changes.
VGM Scores
Currently, Packaging Corp. has a strong Growth Score of A, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Packaging Corp. has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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Packaging Corp. (PKG) Down 4.8% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Packaging Corp. (PKG - Free Report) . Shares have lost about 4.8% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Packaging Corp. due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Packaging Corp Q1 Earnings & Sales Top Estimates, Up Y/Y
Packaging Corp 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.
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. It 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.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
The consensus estimate has shifted 8.78% due to these changes.
VGM Scores
Currently, Packaging Corp. has a strong Growth Score of A, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Packaging Corp. has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.