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Packaging Corp (PKG) Q2 Earnings Top Estimates on High Volumes
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Packaging Corporation of America (PKG - Free Report) reported adjusted earnings per share (EPS) of $2.20 in the second quarter of 2024, beating the Zacks Consensus Estimate of $2.12. The reported figure was higher than the company’s guidance of $2.07 in the quarter under review. However, the bottom line decreased 5% year over year.
Gains from higher volumes in both segments and decreased costs were partially offset by lower prices and mix.
Including one-time items, earnings in the reported quarter were $2.21 per share compared with the prior-year quarter’s $2.24.
Packaging Corporation of America Price, Consensus and EPS Surprise
Sales in the second quarter grew 6.3% year over year to $2.08 billion. The top line beat the Zacks Consensus Estimate of $2.03 billion.
Cost of products sold was up 8.6% year over year to $1.64 billion in the reported quarter. Gross profit fell 1.6% year over year to $438 million. Selling, general and administrative expenses totaled $150 million compared with the prior-year quarter’s $146 million. Adjusted operating income fell 5.9% year over year to $275.5 million.
Segment Performances
Packaging: Sales in this segment increased 6.6% year over year to $1.91 billion in the second quarter of 2024. The figure surpassed our estimate of $1.84 billion.
In the Packaging segment, total corrugated product shipments grew 9.2% year over year. We had anticipated a volume growth of 1.2%, and a favorable price and mix impact of 1.7%.
Adjusted operating profit was $280 million compared with $290 million in the prior-year quarter. Per our model, the estimated segmental adjusted operating income was $242 million.
Paper: The segment’s revenues were $150 million in the April-June quarter, up 5.1% year over year. It beat our estimate of $133 million. The segment reported an adjusted operating profit of $26 million compared with the year-ago quarter’s $34 million. Our projection for the segment’s adjusted operating income was $26 million.
Segmental sales volume rose 12% from second-quarter 2023. We had expected a negative pricing/mix impact of 2.2% in the second quarter. Volume was expected to be a negative 4.5%.
Cash Position
Packaging Corp had a cash balance of $1.17 billion at the second-quarter 2024 end, up from $0.63 billion at the end of the prior-year quarter.
Outlook
Packaging Corp projects a third-quarter 2024 EPS of $2.45.
The company expects sequentially improved prices and mix for both Packaging and Paper segments in the third quarter, driven by the implementation of the previously announced price hike, combined with higher containerboard export prices.
In the Paper segment, volumes are likely to fall sequentially in the third quarter. Operating and converting costs are projected to be higher in the third quarter.
Price Performance
Packaging Corp’s shares have gained 43.2% in the past year compared with the industry’s growth of 11.7%.
Greif, Inc. (GEF - Free Report) reported adjusted earnings per share (EPS) of 82 cents in second-quarter fiscal 2024 (ended Apr 30, 2024), which surpassed the Zacks Consensus Estimate of 77 cents. The bottom line fell 54% year over year. Results were impacted by elevated raw material, transportation and manufacturing costs, and higher SG&A expenses, reflecting increased compensation expenses and costs incurred for strategic investments.
Sales rose 4.1% year over year to $1.37 billion. The top line surpassed the Zacks Consensus Estimate of $1.31 billion.
Packaging Stocks Awaiting Results
AptarGroup, Inc. (ATR - Free Report) is scheduled to release its second-quarter 2024 results on Jul 25. The Zacks Consensus Estimate for ATR’s second-quarter 2024 earnings is pegged at $1.36 per share, suggesting year-over-year growth of 10.6%.
The Zacks Consensus Estimate for the company’s top line is pegged at $925.4 billion, suggesting an increase of 3.4% from the prior year’s actual. ATR has a trailing four-quarter average surprise of 9.3%.
Sealed Air Corporation (SEE - Free Report) , scheduled to release second-quarter 2024 results on Aug 8, has a trailing four-quarter average surprise of 32.3%. The Zacks Consensus Estimate for SEE’s second-quarter 2024 earnings is pegged at 64 cents per share, suggesting a year-over-year fall of 20%.
The Zacks Consensus Estimate for the company’s top line is pegged at $1.31 billion, indicating a decrease of 5.3% from the prior-year reported figure.
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Packaging Corp (PKG) Q2 Earnings Top Estimates on High Volumes
Packaging Corporation of America (PKG - Free Report) reported adjusted earnings per share (EPS) of $2.20 in the second quarter of 2024, beating the Zacks Consensus Estimate of $2.12. The reported figure was higher than the company’s guidance of $2.07 in the quarter under review. However, the bottom line decreased 5% year over year.
Gains from higher volumes in both segments and decreased costs were partially offset by lower prices and mix.
Including one-time items, earnings in the reported quarter were $2.21 per share compared with the prior-year quarter’s $2.24.
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 second quarter grew 6.3% year over year to $2.08 billion. The top line beat the Zacks Consensus Estimate of $2.03 billion.
Cost of products sold was up 8.6% year over year to $1.64 billion in the reported quarter. Gross profit fell 1.6% year over year to $438 million. Selling, general and administrative expenses totaled $150 million compared with the prior-year quarter’s $146 million. Adjusted operating income fell 5.9% year over year to $275.5 million.
Segment Performances
Packaging: Sales in this segment increased 6.6% year over year to $1.91 billion in the second quarter of 2024. The figure surpassed our estimate of $1.84 billion.
In the Packaging segment, total corrugated product shipments grew 9.2% year over year. We had anticipated a volume growth of 1.2%, and a favorable price and mix impact of 1.7%.
Adjusted operating profit was $280 million compared with $290 million in the prior-year quarter. Per our model, the estimated segmental adjusted operating income was $242 million.
Paper: The segment’s revenues were $150 million in the April-June quarter, up 5.1% year over year. It beat our estimate of $133 million. The segment reported an adjusted operating profit of $26 million compared with the year-ago quarter’s $34 million. Our projection for the segment’s adjusted operating income was $26 million.
Segmental sales volume rose 12% from second-quarter 2023. We had expected a negative pricing/mix impact of 2.2% in the second quarter. Volume was expected to be a negative 4.5%.
Cash Position
Packaging Corp had a cash balance of $1.17 billion at the second-quarter 2024 end, up from $0.63 billion at the end of the prior-year quarter.
Outlook
Packaging Corp projects a third-quarter 2024 EPS of $2.45.
The company expects sequentially improved prices and mix for both Packaging and Paper segments in the third quarter, driven by the implementation of the previously announced price hike, combined with higher containerboard export prices.
In the Paper segment, volumes are likely to fall sequentially in the third quarter. Operating and converting costs are projected to be higher in the third quarter.
Price Performance
Packaging Corp’s shares have gained 43.2% in the past year compared with the industry’s growth of 11.7%.
Image Source: Zacks Investment Research
Zacks Rank
Packaging Corp currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Peer Q2 Performance
Greif, Inc. (GEF - Free Report) reported adjusted earnings per share (EPS) of 82 cents in second-quarter fiscal 2024 (ended Apr 30, 2024), which surpassed the Zacks Consensus Estimate of 77 cents. The bottom line fell 54% year over year. Results were impacted by elevated raw material, transportation and manufacturing costs, and higher SG&A expenses, reflecting increased compensation expenses and costs incurred for strategic investments.
Sales rose 4.1% year over year to $1.37 billion. The top line surpassed the Zacks Consensus Estimate of $1.31 billion.
Packaging Stocks Awaiting Results
AptarGroup, Inc. (ATR - Free Report) is scheduled to release its second-quarter 2024 results on Jul 25. The Zacks Consensus Estimate for ATR’s second-quarter 2024 earnings is pegged at $1.36 per share, suggesting year-over-year growth of 10.6%.
The Zacks Consensus Estimate for the company’s top line is pegged at $925.4 billion, suggesting an increase of 3.4% from the prior year’s actual. ATR has a trailing four-quarter average surprise of 9.3%.
Sealed Air Corporation (SEE - Free Report) , scheduled to release second-quarter 2024 results on Aug 8, has a trailing four-quarter average surprise of 32.3%. The Zacks Consensus Estimate for SEE’s second-quarter 2024 earnings is pegged at 64 cents per share, suggesting a year-over-year fall of 20%.
The Zacks Consensus Estimate for the company’s top line is pegged at $1.31 billion, indicating a decrease of 5.3% from the prior-year reported figure.