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Packaging Corp (PKG) Q1 Earnings Top Estimates, Sales Rise Y/Y
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Packaging Corporation of America (PKG - Free Report) reported adjusted earnings per share (EPS) of $1.72 in the first quarter of 2024, beating the Zacks Consensus Estimate of $1.63. The bottom line decreased 22% year over year. The figure was above the company’s guidance of $1.54.
The downside primarily resulted from lower prices and mix in the Packaging and Paper segments. These were partially offset by higher volumes in the Packaging and Paper segments.
Including one-time items, earnings in the reported quarter were $1.63 per share compared with the prior-year quarter’s $2.11.
Packaging Corporation of America Price, Consensus and EPS Surprise
Sales in the first quarter rose 0.2% year over year to $1.98 billion. The top line surpassed the Zacks Consensus Estimate of $1.91 billion.
The cost of products sold moved up 4.3% year over year to $1.61 billion in the first quarter. The gross profit fell 14.1% year over year to $370 million. Selling, general and administrative expenses amounted to $152 million compared with the prior-year quarter’s $148 million. The adjusted operating income fell 26.7% year over year to $206 million.
Segmental Performance
Packaging: Sales in this segment decreased 0.6% year over year to $1.8 billion in the first quarter of 2024. We had anticipated a year-over-year volume decline of 3.7%, and a favorable price and mix impact of 0.1%. In the Packaging segment, total corrugated product shipments per day rose 11% year over year. We had anticipated a 5.1% improvement in daily shipments.
Containerboard production was 1,162,000 tons for the quarter, lower than our expectation of 1,194,524 tons. Containerboard inventory was down 15,000 tons year over year and 24,000 tons sequentially.
Adjusted operating profit was $208 million, a 25.1% drop from $277 million in the prior-year quarter.
Paper: The segment’s revenues were $164 million in the January-March quarter, up 8.5% year over year. The segment’s sales volume rose 18,000 tons year over year and 17,000 tons sequentially.
We expected a pricing/mix benefit of 0.4% in the first quarter. Volume was expected to be a negative 4.4%. The Paper segment reported an adjusted operating profit of $36 million, a 1.4% rise from the year-ago quarter’s $35.6 million.
Cash Position
Packaging Corp had a cash balance of $1.25 billion at the end of the first quarter, up from $0.52 billion of cash held at the end of the prior-year quarter.
Outlook
Packaging Corp projects second-quarter 2024 EPS of $2.07. In the Packaging segment, the company anticipates continued strong demand, and higher corrugated products and containerboard shipments. Pricing and mix are anticipated to be slightly higher following the implementation of PKG's stated January price hikes. However, this will be largely offset by a fall in reported benchmark pricing that took place late in 2023, with export prices remaining relatively unchanged.
In the Paper segment, volumes are likely to fall in the second quarter due to a scheduled maintenance outage at our International Falls, MN-based mill.
Price Performance
PKG shares have lost 27.8% in the past year compared with the industry’s fall of 2.8%.
Image Source: Zacks Investment Research
Zacks Rank & Stocks to Consider
Packaging Corp currently has a Zacks Rank #3 (Hold).
Applied Industrial has an average trailing four-quarter earnings surprise of 13.9%. The Zacks Consensus Estimate for AIT’s 2024 earnings is pinned at $9.49 per share, which indicates year-over-year growth of 7.8%. Estimates have moved north by 1% in the past 60 days. The company’s shares have gained 35.4% in the past year.
The Zacks Consensus Estimate for Chart Industries’ 2024 earnings is pegged at $11.98 per share. The consensus estimate for 2024 earnings has moved 6% north in the past 60 days and suggests year-over-year growth of 93.6%. The company has a trailing four-quarter average earnings surprise of 75.9%. GTLS shares have gained 12.2% in the past year.
The Zacks Consensus Estimate for Cadre Holdings’ 2024 earnings is pegged at $1.18 per share. The consensus estimate for 2024 earnings has moved 7% north in the past 60 days and suggests year-over-year growth of 16.7%. The company has a trailing four-quarter average earnings surprise of 33%. CDRE shares have gained 53.1% in the past year.
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Packaging Corp (PKG) Q1 Earnings Top Estimates, Sales Rise Y/Y
Packaging Corporation of America (PKG - Free Report) reported adjusted earnings per share (EPS) of $1.72 in the first quarter of 2024, beating the Zacks Consensus Estimate of $1.63. The bottom line decreased 22% year over year. The figure was above the company’s guidance of $1.54.
The downside primarily resulted from lower prices and mix in the Packaging and Paper segments. These were partially offset by higher volumes in the Packaging and Paper segments.
Including one-time items, earnings in the reported quarter were $1.63 per share compared with the prior-year quarter’s $2.11.
Packaging Corporation of America Price, Consensus and EPS Surprise
Packaging Corporation of America price-consensus-eps-surprise-chart | Packaging Corporation of America Quote
Operational Update
Sales in the first quarter rose 0.2% year over year to $1.98 billion. The top line surpassed the Zacks Consensus Estimate of $1.91 billion.
The cost of products sold moved up 4.3% year over year to $1.61 billion in the first quarter. The gross profit fell 14.1% year over year to $370 million. Selling, general and administrative expenses amounted to $152 million compared with the prior-year quarter’s $148 million. The adjusted operating income fell 26.7% year over year to $206 million.
Segmental Performance
Packaging: Sales in this segment decreased 0.6% year over year to $1.8 billion in the first quarter of 2024. We had anticipated a year-over-year volume decline of 3.7%, and a favorable price and mix impact of 0.1%. In the Packaging segment, total corrugated product shipments per day rose 11% year over year. We had anticipated a 5.1% improvement in daily shipments.
Containerboard production was 1,162,000 tons for the quarter, lower than our expectation of 1,194,524 tons. Containerboard inventory was down 15,000 tons year over year and 24,000 tons sequentially.
Adjusted operating profit was $208 million, a 25.1% drop from $277 million in the prior-year quarter.
Paper: The segment’s revenues were $164 million in the January-March quarter, up 8.5% year over year. The segment’s sales volume rose 18,000 tons year over year and 17,000 tons sequentially.
We expected a pricing/mix benefit of 0.4% in the first quarter. Volume was expected to be a negative 4.4%.
The Paper segment reported an adjusted operating profit of $36 million, a 1.4% rise from the year-ago quarter’s $35.6 million.
Cash Position
Packaging Corp had a cash balance of $1.25 billion at the end of the first quarter, up from $0.52 billion of cash held at the end of the prior-year quarter.
Outlook
Packaging Corp projects second-quarter 2024 EPS of $2.07. In the Packaging segment, the company anticipates continued strong demand, and higher corrugated products and containerboard shipments. Pricing and mix are anticipated to be slightly higher following the implementation of PKG's stated January price hikes. However, this will be largely offset by a fall in reported benchmark pricing that took place late in 2023, with export prices remaining relatively unchanged.
In the Paper segment, volumes are likely to fall in the second quarter due to a scheduled maintenance outage at our International Falls, MN-based mill.
Price Performance
PKG shares have lost 27.8% in the past year compared with the industry’s fall of 2.8%.
Image Source: Zacks Investment Research
Zacks Rank & Stocks to Consider
Packaging Corp currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks from the Industrial Products sector are Applied Industrial Technologies (AIT - Free Report) , Chart Industries, Inc. (GTLS - Free Report) and Cadre Holdings, Inc. (CDRE - Free Report) . AIT currently sports a Zacks Rank #1 (Strong Buy), and GTLS and CDRE carry a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
Applied Industrial has an average trailing four-quarter earnings surprise of 13.9%. The Zacks Consensus Estimate for AIT’s 2024 earnings is pinned at $9.49 per share, which indicates year-over-year growth of 7.8%. Estimates have moved north by 1% in the past 60 days. The company’s shares have gained 35.4% in the past year.
The Zacks Consensus Estimate for Chart Industries’ 2024 earnings is pegged at $11.98 per share. The consensus estimate for 2024 earnings has moved 6% north in the past 60 days and suggests year-over-year growth of 93.6%. The company has a trailing four-quarter average earnings surprise of 75.9%. GTLS shares have gained 12.2% in the past year.
The Zacks Consensus Estimate for Cadre Holdings’ 2024 earnings is pegged at $1.18 per share. The consensus estimate for 2024 earnings has moved 7% north in the past 60 days and suggests year-over-year growth of 16.7%. The company has a trailing four-quarter average earnings surprise of 33%. CDRE shares have gained 53.1% in the past year.