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Packaging Corp Earnings Surpass Estimates in Q2, Sales Rise Y/Y
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Key Takeaways
PKG reported Q2 adjusted EPS of $2.48, exceeding guidance and rising 13% y/y.
Q2 sales rose 4.6% y/y to $2.17B, driven by improved pricing and mix across Packaging and Paper.
The gross margin expanded to 22.2% from 21.1% as gross profit jumped 10.3% y/y.
Packaging Corporation of America (PKG - Free Report) reported adjusted earnings per share (EPS) of $2.48 in the second quarter of 2025, beating the Zacks Consensus Estimate of $2.44. The reported figure was higher than the company’s guidance of $2.41 in the quarter under review. Moreover, the bottom line increased 13% year over year. The upside was driven by higher prices and mix in both segments.
Including one-time items, earnings in the reported quarter were $2.67 per share compared with the prior-year quarter’s $2.21.
Packaging Corporation of America Price, Consensus and EPS Surprise
Sales in the second quarter grew 4.6% year over year to $2.17 billion. The top line beat the Zacks Consensus Estimate of $2.16 billion.
Cost of products sold was up 3.1% year over year to $1.69 billion in the reported quarter. Gross profit increased 10.3% year over year to $483 million. The gross margin came in at 22.2% compared with 21.1% a year ago.
Selling, general and administrative expenses totaled $153 million compared with the prior-year quarter’s $149.5 million. Adjusted operating income increased 12.8% year over year to $311 million.
Packaging Corp’s Q2 Segment Performances
Packaging: Sales in this segment increased 5.1% year over year to $2.01 billion in the second quarter of 2024. The figure beat our estimate of $1.99 billion.
In the Packaging segment, total corrugated product shipments remained flat year over year. We had anticipated volume growth of 1.2%, and a favorable price and mix impact of 1.7%.
Operating profit was $346 million compared with $280 million in the prior-year quarter. Our model had estimated the segment’s operating income at $291 million.
Paper: The segment’s revenues were $146 million in the April-June quarter, down 2.9% year over year. It beat our estimate of $140 million. The segment reported an operating profit of $25.8 million compared with the year-ago quarter’s $26.7 million. Our projection for the segment’s operating income was $46 million.
Segmental sales volume fell 5% from second-quarter 2024. We had expected pricing/mix growth of 1% in the second quarter. Volume was expected to be a negative 7.9%.
PKG’s Cash Flow Updates
Packaging Corp had a cash balance of $0.96 billion at the end of the second quarter, down from $1.17 billion held at the end of the prior-year quarter.
Packaging Corp’s Outlook
PKG projects a third-quarter 2025 EPS of $2.80.
The company expects prices and mix in the Packaging segment to be relatively flat in the third quarter of 2025. In the Paper segment, pricing is expected to be flat. However, production and sales are expected to increase with the International Falls mill outage completed in the second quarter of 2025.
PKG Stock’s Price Performance
Packaging Corp’s shares have gained 8.9% in the past year against the industry’s decline of 2.2%.
Ball Corporation (BALL - Free Report) is scheduled to release second-quarter 2025 results on Aug. 5. The Zacks Consensus Estimate for BALL’s second-quarter 2025 earnings is pegged at 87 cents per share, suggesting year-over-year growth of 17.6%.
The Zacks Consensus Estimate for Ball Corp’s top line is pegged at $3.15 billion, indicating growth of 6.6% from the prior-year actual. Ball Corp has a trailing four-quarter average surprise of 4.9%.
Silgan Holdings Inc. (SLGN - Free Report) is scheduled to release second-quarter 2025 results on July 30. The Zacks Consensus Estimate for SLGN’s second-quarter 2025 earnings is pegged at $1.03 per share, suggesting year-over-year growth of 17%.
The Zacks Consensus Estimate for Silgan Holdings’ top line is pegged at $1.53 billion, implying an increase of 11.1% from the prior-year actual. Silgan Holdings has a trailing four-quarter average surprise of 2.1%.
AptarGroup, Inc. (ATR - Free Report) is scheduled to release second-quarter 2025 results on July 31. The Zacks Consensus Estimate for AptarGroup’s second-quarter 2025 earnings is pegged at $1.58 per share, suggesting year-over-year growth of 15.3%.
The Zacks Consensus Estimate for the company’s top line is pegged at $946.1 million, indicating growth of 3.9% from the prior-year actual. ATR has a trailing four-quarter average surprise of 7.3%.
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Packaging Corp Earnings Surpass Estimates in Q2, Sales Rise Y/Y
Key Takeaways
Packaging Corporation of America (PKG - Free Report) reported adjusted earnings per share (EPS) of $2.48 in the second quarter of 2025, beating the Zacks Consensus Estimate of $2.44. The reported figure was higher than the company’s guidance of $2.41 in the quarter under review. Moreover, the bottom line increased 13% year over year. The upside was driven by higher prices and mix in both segments.
Including one-time items, earnings in the reported quarter were $2.67 per share compared with the prior-year quarter’s $2.21.
Packaging Corporation of America Price, Consensus and EPS Surprise
Packaging Corporation of America price-consensus-eps-surprise-chart | Packaging Corporation of America Quote
PKG’s Q2 Gross Margin Rises Y/Y
Sales in the second quarter grew 4.6% year over year to $2.17 billion. The top line beat the Zacks Consensus Estimate of $2.16 billion.
Cost of products sold was up 3.1% year over year to $1.69 billion in the reported quarter. Gross profit increased 10.3% year over year to $483 million. The gross margin came in at 22.2% compared with 21.1% a year ago.
Selling, general and administrative expenses totaled $153 million compared with the prior-year quarter’s $149.5 million. Adjusted operating income increased 12.8% year over year to $311 million.
Packaging Corp’s Q2 Segment Performances
Packaging: Sales in this segment increased 5.1% year over year to $2.01 billion in the second quarter of 2024. The figure beat our estimate of $1.99 billion.
In the Packaging segment, total corrugated product shipments remained flat year over year. We had anticipated volume growth of 1.2%, and a favorable price and mix impact of 1.7%.
Operating profit was $346 million compared with $280 million in the prior-year quarter. Our model had estimated the segment’s operating income at $291 million.
Paper: The segment’s revenues were $146 million in the April-June quarter, down 2.9% year over year. It beat our estimate of $140 million. The segment reported an operating profit of $25.8 million compared with the year-ago quarter’s $26.7 million. Our projection for the segment’s operating income was $46 million.
Segmental sales volume fell 5% from second-quarter 2024. We had expected pricing/mix growth of 1% in the second quarter. Volume was expected to be a negative 7.9%.
PKG’s Cash Flow Updates
Packaging Corp had a cash balance of $0.96 billion at the end of the second quarter, down from $1.17 billion held at the end of the prior-year quarter.
Packaging Corp’s Outlook
PKG projects a third-quarter 2025 EPS of $2.80.
The company expects prices and mix in the Packaging segment to be relatively flat in the third quarter of 2025. In the Paper segment, pricing is expected to be flat. However, production and sales are expected to increase with the International Falls mill outage completed in the second quarter of 2025.
PKG Stock’s Price Performance
Packaging Corp’s shares have gained 8.9% in the past year against the industry’s decline of 2.2%.
Image Source: Zacks Investment Research
Packaging Corp’s Zacks Rank
PKG currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Packaging Stocks Awaiting Results
Ball Corporation (BALL - Free Report) is scheduled to release second-quarter 2025 results on Aug. 5. The Zacks Consensus Estimate for BALL’s second-quarter 2025 earnings is pegged at 87 cents per share, suggesting year-over-year growth of 17.6%.
The Zacks Consensus Estimate for Ball Corp’s top line is pegged at $3.15 billion, indicating growth of 6.6% from the prior-year actual. Ball Corp has a trailing four-quarter average surprise of 4.9%.
Silgan Holdings Inc. (SLGN - Free Report) is scheduled to release second-quarter 2025 results on July 30. The Zacks Consensus Estimate for SLGN’s second-quarter 2025 earnings is pegged at $1.03 per share, suggesting year-over-year growth of 17%.
The Zacks Consensus Estimate for Silgan Holdings’ top line is pegged at $1.53 billion, implying an increase of 11.1% from the prior-year actual. Silgan Holdings has a trailing four-quarter average surprise of 2.1%.
AptarGroup, Inc. (ATR - Free Report) is scheduled to release second-quarter 2025 results on July 31. The Zacks Consensus Estimate for AptarGroup’s second-quarter 2025 earnings is pegged at $1.58 per share, suggesting year-over-year growth of 15.3%.
The Zacks Consensus Estimate for the company’s top line is pegged at $946.1 million, indicating growth of 3.9% from the prior-year actual. ATR has a trailing four-quarter average surprise of 7.3%.