We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Packaging Corp.'s Q3 Earnings Lag Estimates, Rise Y/Y on Higher Prices
Read MoreHide Full Article
Key Takeaways
Packaging Corp. posted Q3 adjusted EPS of $2.73, missing estimates but up 3% from last year.
Revenues grew 6% to $2.3B, led by higher prices in both segments.
PKG expects Q4 EPS of $2.40, with higher shipments but seasonal cost and mix headwinds ahead.
Packaging Corporation of America (PKG - Free Report) posted adjusted earnings per share of $2.73 in the third quarter of 2025, missing the Zacks Consensus Estimate of $2.83 by 4%.
The bottom line, however, increased 3% year over year, supported by higher prices and mix in both the segments, along with lower fiber costs and maintenance outage expense. These gains were partially offset by higher operating costs, lower production volumes, increased depreciation and freight expenses, and a loss recorded for the first month of owning Greif’s (GEF - Free Report) containerboard business.
Including one-time items, earnings in the reported quarter were $2.51 per share compared with the prior-year quarter’s $2.64. The figure included special items for costs and charges related to the acquisition of Greif’s containerboard business and costs related to closures of corrugated products facilities.
Packaging Corporation of America Price, Consensus and EPS Surprise
PKG’s Q3 Revenues Rise, Operating Margin Sees Slight Uptick
Sales in the third quarter grew 6% year over year to $2.3 billion. The top line beat the Zacks Consensus Estimate of $2.26 billion.
Cost of products sold was up 8% year over year to $1.81 billion in the reported quarter. Gross profit dipped 0.2% year over year to $504 million. The gross margin came in at 21.8% compared with 23.1% a year ago.
Selling, general and administrative expenses totaled $154 million compared with the prior-year quarter’s $162 million. Adjusted operating income increased 7% year over year to $351 million. Adjusted operating margin was 15.2% compared with 15% in the year-ago quarter.
Packaging Corp.’s Q3 Segment Performances
Packaging: Sales in this segment increased 6% year over year to $2.13 billion in the third quarter of 2025. The figure beat our estimate of $2.06 billion. In the Packaging segment, total corrugated product shipments for the legacy business were down 1.1% year over year. Including the acquired business, shipments were up 5.3%.
We had anticipated a volume decline of 2.5% (excluding the impact of the acquisition) and a favorable price and mix impact of 5.1%.
Containerboard production was 1,255,000 tons at the legacy mills and 47,000 tons at the acquired mills.
Adjusted operating profit was $348 million compared with $322 million in the prior-year quarter. Our model had estimated the segment’s operating income at $341 million.
Paper: The segment’s revenues were $161 million in the quarter, up 1.2% year over year. It beat our estimate of $151 million. The segment reported an adjusted operating profit of $36 million compared with the year-ago quarter’s $39 million. Our projection for the segment’s operating income was $38 million.
Segmental sales volume fell 0.7% from third-quarter 2024. We had expected pricing/mix growth of 2.1% for the quarter and volume impact was expected to be a negative 7.5%.
PKG’s Cash Flow Updates
Packaging Corp. had a cash balance of $806.4 million at the end of the third quarter, down from $841 million held at the end of the prior-year quarter.
Packaging Corp.’s Outlook
PKG projects a fourth-quarter 2025 EPS of $2.40. This suggests a year-over-year decline of 2.8% and a sequential decline of 12%.
The company expects higher daily corrugated shipments compared with the third quarter. Export containerboard sales will rise sequentially but will remain below the typical fourth-quarter levels. Containerboard production in the legacy business will dip sequentially due to the maintenance outage at the DeRidder mill. The related maintenance outage will have an impact of 29 cents on earnings.
The Packaging segment will see lower prices due to a less favorable seasonal mix. The Paper segment is expected to see lower volumes compared with the seasonally stronger third quarter and flat pricing. Energy and fiber costs will be higher due to seasonality, while freight and other operating costs will likely remain steady.
The company expects improved results from the acquired business. This will be tempered by the continued lower production and higher maintenance expenses from the Massillon mill outage that continued into October and seasonally lower volumes and mix in the corrugated business. A full quarter of improved operations at the Riverville mill will offset these impacts.
PKG Stock’s Price Performance
Packaging Corp.’s shares have lost 8.3% in the past year compared with the industry’s decline of 34.0%.
Recent Earnings Performance of PKG’s Industry Peer
Avery Dennison Corporation (AVY - Free Report) reported delivered third-quarter 2025 adjusted earnings of $2.37 per share, beating the Zacks Consensus Estimate of $2.32. The bottom line increased 1.7% year over year, driven by productivity gains.
Avery Dennison’s total revenues grew 1.5% year over year to $2.22 billion and beat the consensus estimate of $2.21 billion. Avery Dennison expects adjusted EPS between $2.35 and $2.45 for fourth-quarter 2025.
A Quick Look at How Another PKG Peer Will Likely Fare in Q3
AptarGroup, Inc. (ATR - Free Report) is scheduled to release third-quarter 2025 results on Oct. 30. The Zacks Consensus Estimate for AptarGroup’s third-quarter 2025 earnings is pegged at $5.88 per share, indicating year-over-year growth of 4.3%.
The Zacks Consensus Estimate for the company’s top line is pegged at $3.71 billion, indicating growth of 3.6% from the prior-year actual. ATR has a trailing four-quarter average surprise of 8.3%.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Packaging Corp.'s Q3 Earnings Lag Estimates, Rise Y/Y on Higher Prices
Key Takeaways
Packaging Corporation of America (PKG - Free Report) posted adjusted earnings per share of $2.73 in the third quarter of 2025, missing the Zacks Consensus Estimate of $2.83 by 4%.
The bottom line, however, increased 3% year over year, supported by higher prices and mix in both the segments, along with lower fiber costs and maintenance outage expense. These gains were partially offset by higher operating costs, lower production volumes, increased depreciation and freight expenses, and a loss recorded for the first month of owning Greif’s (GEF - Free Report) containerboard business.
Including one-time items, earnings in the reported quarter were $2.51 per share compared with the prior-year quarter’s $2.64. The figure included special items for costs and charges related to the acquisition of Greif’s containerboard business and costs related to closures of corrugated products facilities.
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 Q3 Revenues Rise, Operating Margin Sees Slight Uptick
Sales in the third quarter grew 6% year over year to $2.3 billion. The top line beat the Zacks Consensus Estimate of $2.26 billion.
Cost of products sold was up 8% year over year to $1.81 billion in the reported quarter. Gross profit dipped 0.2% year over year to $504 million. The gross margin came in at 21.8% compared with 23.1% a year ago.
Selling, general and administrative expenses totaled $154 million compared with the prior-year quarter’s $162 million. Adjusted operating income increased 7% year over year to $351 million. Adjusted operating margin was 15.2% compared with 15% in the year-ago quarter.
Packaging Corp.’s Q3 Segment Performances
Packaging: Sales in this segment increased 6% year over year to $2.13 billion in the third quarter of 2025. The figure beat our estimate of $2.06 billion.
In the Packaging segment, total corrugated product shipments for the legacy business were down 1.1% year over year. Including the acquired business, shipments were up 5.3%.
We had anticipated a volume decline of 2.5% (excluding the impact of the acquisition) and a favorable price and mix impact of 5.1%.
Containerboard production was 1,255,000 tons at the legacy mills and 47,000 tons at the acquired mills.
Adjusted operating profit was $348 million compared with $322 million in the prior-year quarter. Our model had estimated the segment’s operating income at $341 million.
Paper: The segment’s revenues were $161 million in the quarter, up 1.2% year over year. It beat our estimate of $151 million. The segment reported an adjusted operating profit of $36 million compared with the year-ago quarter’s $39 million. Our projection for the segment’s operating income was $38 million.
Segmental sales volume fell 0.7% from third-quarter 2024. We had expected pricing/mix growth of 2.1% for the quarter and volume impact was expected to be a negative 7.5%.
PKG’s Cash Flow Updates
Packaging Corp. had a cash balance of $806.4 million at the end of the third quarter, down from $841 million held at the end of the prior-year quarter.
Packaging Corp.’s Outlook
PKG projects a fourth-quarter 2025 EPS of $2.40. This suggests a year-over-year decline of 2.8% and a sequential decline of 12%.
The company expects higher daily corrugated shipments compared with the third quarter. Export containerboard sales will rise sequentially but will remain below the typical fourth-quarter levels. Containerboard production in the legacy business will dip sequentially due to the maintenance outage at the DeRidder mill. The related maintenance outage will have an impact of 29 cents on earnings.
The Packaging segment will see lower prices due to a less favorable seasonal mix. The Paper segment is expected to see lower volumes compared with the seasonally stronger third quarter and flat pricing. Energy and fiber costs will be higher due to seasonality, while freight and other operating costs will likely remain steady.
The company expects improved results from the acquired business. This will be tempered by the continued lower production and higher maintenance expenses from the Massillon mill outage that continued into October and seasonally lower volumes and mix in the corrugated business. A full quarter of improved operations at the Riverville mill will offset these impacts.
PKG Stock’s Price Performance
Packaging Corp.’s shares have lost 8.3% in the past year compared with the industry’s decline of 34.0%.
Image Source: Zacks Investment Research
Packaging Corp.’s Zacks Rank
PKG currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Earnings Performance of PKG’s Industry Peer
Avery Dennison Corporation (AVY - Free Report) reported delivered third-quarter 2025 adjusted earnings of $2.37 per share, beating the Zacks Consensus Estimate of $2.32. The bottom line increased 1.7% year over year, driven by productivity gains.
Avery Dennison’s total revenues grew 1.5% year over year to $2.22 billion and beat the consensus estimate of $2.21 billion. Avery Dennison expects adjusted EPS between $2.35 and $2.45 for fourth-quarter 2025.
A Quick Look at How Another PKG Peer Will Likely Fare in Q3
AptarGroup, Inc. (ATR - Free Report) is scheduled to release third-quarter 2025 results on Oct. 30. The Zacks Consensus Estimate for AptarGroup’s third-quarter 2025 earnings is pegged at $5.88 per share, indicating year-over-year growth of 4.3%.
The Zacks Consensus Estimate for the company’s top line is pegged at $3.71 billion, indicating growth of 3.6% from the prior-year actual. ATR has a trailing four-quarter average surprise of 8.3%.