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Packaging Corporation of America (PKG - Free Report) reported adjusted earnings per share (EPS) of $2.65 in the third quarter of 2024, beating the Zacks Consensus Estimate of earnings of $2.48. The bottom line was higher than the company’s earnings guidance of $2.45 per share and grew 29% year over year. The upside was driven by higher volume in both segments, and increased prices and mix in the Packaging segment, partially offset by lower prices and mix in the Paper segment.
Including one-time items, earnings in the reported quarter were $2.64 per share compared with the prior-year quarter’s earnings of $2.03.
Packaging Corp’s Sales & Margins Improve Y/Y in Q3
Sales in the third quarter rose 12.6% year over year to $2.18 billion due to higher volumes. The top line beat the Zacks Consensus Estimate of $2.09 billion.
Packaging Corporation of America Price, Consensus and EPS Surprise
The cost of products sold rose 10.1% year over year to $1.68 billion in the reported quarter. Gross profit grew 22.4% year over year to $505 million. Selling, general and administrative expenses totaled $162 million compared with the prior-year quarter’s $144 million. Adjusted operating income improved 25.6% year over year to $328 million.
PKG’s Q3 Segmental Performances
Packaging: Sales in this segment increased 14.1% year over year to $2.01 billion in the third quarter of 2024. The figure surpassed our estimate of $1.9 billion.
In the Packaging segment, total corrugated product shipments grew 11.1% year over year. We anticipated volume growth of 11.3%, and an unfavorable price and mix impact of 3.2%.
Adjusted operating profit was $322 million compared with $257 million in the prior-year quarter. Per our model, the estimated segmental adjusted operating income was $300 million.
Paper: The segment’s revenues were $159 million in the July-September quarter, up 0.9% year over year. It missed our estimate of $167 million. The segment reported an adjusted operating profit of $38.5 million compared with the year-ago quarter’s $30.2 million. Our projection for the segment’s adjusted operating income was $34 million.
Segmental sales volume rose 4% from third-quarter 2023. We had expected a negative pricing/mix impact of 4% in the third quarter. Volume was expected to be a positive 9%.
Packaging Corp’s Cash Flow Updates
The company ended the third quarter of 2024 with a cash balance of $841 million compared with $726 million at the end of the prior-year quarter.
PKG’s 2024 Outlook
Packaging Corp projects a fourth-quarter 2024 EPS of $2.47.
The company forecasts strong demand for its Packaging segment, driven by increasing corrugated shipments per day and slightly higher containerboard production. Paper segment shipments are expected to decline from the seasonally elevated levels recorded in third-quarter 2023, although prices and product mix should be relatively stable.
Packaging Corp’s Stock Price Outperforms Industry
PKG shares have gained 54% in the past year compared with the industry’s 37.9% growth.
Greif, Inc. (GEF - Free Report) reported adjusted EPS of $1.03 in third-quarter fiscal 2024 (ended July 31, 2024), missing the Zacks Consensus Estimate of $1.17. The bottom line fell 41.1% year over year.
GEF’s sales moved up 9.3% year over year to $1.45 billion. The top line surpassed the Zacks Consensus Estimate of $1.42 billion. The upside mainly resulted from higher volumes, increased average selling prices and gains from recent acquisitions.
Packaging Stocks Awaiting Results
AptarGroup, Inc. (ATR - Free Report) is scheduled to release its third-quarter 2024 results on Oct. 24. The Zacks Consensus Estimate for ATR’s third-quarter 2024 earnings is pegged at $1.43 per share, suggesting year-over-year growth of 2.9%.
The Zacks Consensus Estimate for the company’s top line is pegged at $932 billion, suggesting an increase of 4.5% from the prior year’s actual. ATR has a trailing four-quarter average surprise of 7.2%.
Sealed Air Corporation (SEE - Free Report) , scheduled to release third-quarter 2024 results on Nov. 7, has a trailing four-quarter average surprise of 35.2%. The Zacks Consensus Estimate for SEE’s third-quarter 2024 earnings is pegged at 66 cents per share, implying a year-over-year fall of 14.3%.
The Zacks Consensus Estimate for the company’s top line is pegged at $1.34 billion, indicating a decrease of 2.9% from the prior-year reported figure.
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Packaging Corp Q3 Earnings Beat, Sales Rise Y/Y on Higher Volumes
Packaging Corporation of America (PKG - Free Report) reported adjusted earnings per share (EPS) of $2.65 in the third quarter of 2024, beating the Zacks Consensus Estimate of earnings of $2.48. The bottom line was higher than the company’s earnings guidance of $2.45 per share and grew 29% year over year. The upside was driven by higher volume in both segments, and increased prices and mix in the Packaging segment, partially offset by lower prices and mix in the Paper segment.
Including one-time items, earnings in the reported quarter were $2.64 per share compared with the prior-year quarter’s earnings of $2.03.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Packaging Corp’s Sales & Margins Improve Y/Y in Q3
Sales in the third quarter rose 12.6% year over year to $2.18 billion due to higher volumes. The top line beat the Zacks Consensus Estimate of $2.09 billion.
Packaging Corporation of America Price, Consensus and EPS Surprise
Packaging Corporation of America price-consensus-eps-surprise-chart | Packaging Corporation of America Quote
The cost of products sold rose 10.1% year over year to $1.68 billion in the reported quarter. Gross profit grew 22.4% year over year to $505 million. Selling, general and administrative expenses totaled $162 million compared with the prior-year quarter’s $144 million. Adjusted operating income improved 25.6% year over year to $328 million.
PKG’s Q3 Segmental Performances
Packaging: Sales in this segment increased 14.1% year over year to $2.01 billion in the third quarter of 2024. The figure surpassed our estimate of $1.9 billion.
In the Packaging segment, total corrugated product shipments grew 11.1% year over year. We anticipated volume growth of 11.3%, and an unfavorable price and mix impact of 3.2%.
Adjusted operating profit was $322 million compared with $257 million in the prior-year quarter. Per our model, the estimated segmental adjusted operating income was $300 million.
Paper: The segment’s revenues were $159 million in the July-September quarter, up 0.9% year over year. It missed our estimate of $167 million. The segment reported an adjusted operating profit of $38.5 million compared with the year-ago quarter’s $30.2 million. Our projection for the segment’s adjusted operating income was $34 million.
Segmental sales volume rose 4% from third-quarter 2023. We had expected a negative pricing/mix impact of 4% in the third quarter. Volume was expected to be a positive 9%.
Packaging Corp’s Cash Flow Updates
The company ended the third quarter of 2024 with a cash balance of $841 million compared with $726 million at the end of the prior-year quarter.
PKG’s 2024 Outlook
Packaging Corp projects a fourth-quarter 2024 EPS of $2.47.
The company forecasts strong demand for its Packaging segment, driven by increasing corrugated shipments per day and slightly higher containerboard production. Paper segment shipments are expected to decline from the seasonally elevated levels recorded in third-quarter 2023, although prices and product mix should be relatively stable.
Packaging Corp’s Stock Price Outperforms Industry
PKG shares have gained 54% in the past year compared with the industry’s 37.9% growth.
Image Source: Zacks Investment Research
PKG’s Zacks Rank
Packaging Corp currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Peer Performance of Packaging Corp in Q3
Greif, Inc. (GEF - Free Report) reported adjusted EPS of $1.03 in third-quarter fiscal 2024 (ended July 31, 2024), missing the Zacks Consensus Estimate of $1.17. The bottom line fell 41.1% year over year.
GEF’s sales moved up 9.3% year over year to $1.45 billion. The top line surpassed the Zacks Consensus Estimate of $1.42 billion. The upside mainly resulted from higher volumes, increased average selling prices and gains from recent acquisitions.
Packaging Stocks Awaiting Results
AptarGroup, Inc. (ATR - Free Report) is scheduled to release its third-quarter 2024 results on Oct. 24. The Zacks Consensus Estimate for ATR’s third-quarter 2024 earnings is pegged at $1.43 per share, suggesting year-over-year growth of 2.9%.
The Zacks Consensus Estimate for the company’s top line is pegged at $932 billion, suggesting an increase of 4.5% from the prior year’s actual. ATR has a trailing four-quarter average surprise of 7.2%.
Sealed Air Corporation (SEE - Free Report) , scheduled to release third-quarter 2024 results on Nov. 7, has a trailing four-quarter average surprise of 35.2%. The Zacks Consensus Estimate for SEE’s third-quarter 2024 earnings is pegged at 66 cents per share, implying a year-over-year fall of 14.3%.
The Zacks Consensus Estimate for the company’s top line is pegged at $1.34 billion, indicating a decrease of 2.9% from the prior-year reported figure.