Packaging Corporation of America Reports First Quarter 2025 Results

Packaging Corporation of America (NYSE: PKG) today reported first quarter 2025 net income of $204 million, or $2.26 per share, and net income of $208 million, or $2.31 per share, excluding special items. First quarter net sales were $2.1 billion in 2025 and $2.0 billion in 2024.

Reported earnings in the first quarter of 2025 include special items primarily for closure costs related to corrugated products facilities.

Excluding special items, the $.59 per share increase in first quarter 2025 earnings compared to the first quarter of 2024 was driven primarily by higher prices and mix $.78 and volume $.27 in the Packaging segment, higher prices and mix in the Paper segment $.01, lower freight and logistics expenses $.01, and lower scheduled outage costs $.01. These items were partially offset by higher operating costs ($.37), lower volume in the Paper segment ($.02), higher depreciation and other expenses ($.03), higher tax rate ($.04), and higher interest expense ($.03).

Results were $.10 above first quarter guidance of $2.21 per share primarily due to higher prices and mix in the Packaging segment.

Financial information by segment is summarized below and in the schedules with this release.

In the Packaging segment, total corrugated products shipments and shipments per day were up 2.5% compared to the first quarter of 2024. Containerboard production was 1,250,000 tons, and containerboard inventory was up 75,000 tons from the first quarter of 2024 and down 3,000 tons compared to the fourth quarter of 2024. In the Paper segment, sales volume was down 7% from the first quarter of 2024 and up 2% compared to the fourth quarter of 2024.

Commenting on reported results, Mark W. Kowlzan, Chairman and CEO, said, “A new first quarter revenue record was achieved to begin the new year. In the Packaging segment we had excellent implementation of our previously announced price increases and, although we began to see some pullback in the middle of the quarter related to the uncertainty created by global trade tensions, box demand was solid and exceeded a very strong comparative period in last year’s first quarter. Outstanding operational performance and scheduled outage execution at our mills delivered record first quarter containerboard production to meet this demand, and we ended the quarter at targeted inventory levels. Our Paper segment continued to achieve impressive margins with both volume and prices slightly above original estimates. Across the Company, continued emphasis on operational efficiency, cost reduction initiatives, and capital project execution helped minimize the persistent inflation we see throughout most of our cost structure.”

“Looking ahead as we move from the first and into the second quarter,” Mr. Kowlzan added, “as always, our attention will remain on what we can control. Our North American focus together with our balance sheet strength, well-capitalized mills and plants, commitment to strategic goals, and proven ability to respond quickly and effectively to external factors will serve us well during this period of economic uncertainty. We anticipate continued ambiguity relative to domestic and foreign tariff actions and their effect on global trade and our demand trends. Therefore, we have made certain assumptions in our guidance to recognize potential negative impacts to volume and costs from this uncertainty. In the Packaging segment, we expect domestic prices to improve with continued implementation of our price increases, along with fairly flat export prices. Although we see box shipments improving, operating costs will be negatively impacted due to lower containerboard volume as we run our operations to match demand assumptions. We have also adjusted our planned maintenance outage schedule and pulled up an outage that was scheduled for later in the year resulting in higher second quarter costs than what we had provided previously. In the Paper segment, implementation of the higher published index prices from the first quarter will continue, although volume will be lower with the planned maintenance outage at our International Falls, MN mill. Rail contract rate increases at six of our mills during the first and second quarters will result in higher freight and logistics expenses, and depreciation expense is assumed to be higher as well. Considering these items, we expect second quarter earnings of $2.41 per share.”

We present our earnings expectation for the upcoming quarter excluding special items as special items are difficult to predict and quantify and may reflect the effect of future events. We do not currently expect any significant special items during the second quarter; however, additional special items may arise due to second quarter events.

PCA is the third largest producer of containerboard products and a leading producer of uncoated freesheet paper in North America. PCA operates eight mills and 85 corrugated products plants and related facilities.

Some of the statements in this press release are forward-looking statements. Forward-looking statements include statements about our future earnings and financial condition, expected benefits from acquisitions and restructuring activities, our industry and our business strategy. Statements that contain words such as “will”, “should”, “anticipate”, “believe”, “expect”, “intend”, “estimate”, “hope” or similar expressions, are forward-looking statements. These forward-looking statements are based on the current expectations of PCA. Because forward-looking statements involve inherent risks and uncertainties, the plans, actions and actual results of PCA could differ materially. Among the factors that could cause plans, actions and results to differ materially from PCA’s current expectations include the following: the impact of general economic conditions; conditions in the paper and packaging industries, including competition, product demand and product pricing; fluctuations in wood fiber and recycled fiber costs; fluctuations in purchased energy costs; the possibility of unplanned outages or interruptions at our principal facilities; and legislative or regulatory requirements, particularly concerning environmental matters, as well as those identified under Item 1A. Risk Factors in PCA’s Annual Report on Form 10-K for the year ended December 31, 2024 filed with the Securities and Exchange Commission and available at the SEC’s website at “www.sec.gov”.

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