Packaging Corporation of America, a leading producer of containerboard products, has announced its financial results for the third quarter of the year. Unfortunately, the company experienced a decline in both sales and earnings compared to the same period last year, despite seeing an increase in shipments.
Financial Overview
For the quarter ended September 30, Packaging Corporation of America reported a net income of $183.2 million, or $2.03 per share. This is a decrease from the previous year’s net income of $262.5 million, or $2.80 per share. Adjusted earnings for the third quarter were $2.05 per share, surpassing analysts’ expectations of $1.93.
Net sales for the quarter totaled $1.94 billion, falling short of the estimated $1.99 billion according to analysts surveyed by FactSet.
Factors Affecting Performance
The company attributes the decline in earnings to several factors, including higher operating and converting costs. These costs have been driven by increased prices of recycled fiber, seasonal energy expenses, and the restart of Packaging Corporation of America’s Wallula mill.
Future Outlook
Despite the challenges faced in the third quarter, Chief Executive Mark Kowlzan is optimistic about the company’s prospects moving forward. Kowlzan stated that they anticipate fewer market-related disruptions, with inventory levels returning to normal and higher daily shipments in their corrugated products facilities. However, Kowlzan also acknowledged that the fourth quarter will have one less shipping day compared to the previous quarter.
Packaging Corporation of America expects fourth-quarter earnings to be $1.76 per share.