01—Abstract
Summary
Summary of the 10-Q filed August 7, 2025. Cited figures are marked; the original filing is the authoritative source.
Packaging Corporation of America reported second-quarter 2025 net sales of $2,171.3 milliona, up from $2,075.3 million in the second quarter of 2024, and net income of $241.5 million, or $2.67 per diluted share, versus $198.9 million, or $2.21 per diluted share, a year earlier.
Net income included $17 millionb of net special items income in the quarter; excluding special items, net income was $224.2 million, or $2.48 per diluted share. Income from operations rose to $333.7 million from $276.0 million, driven primarily by higher containerboard and corrugated products prices and mix in the Packaging segment and lower fiber costs, partially offset by higher operating costs, maintenance outage expense, and freight expense. For the six months ended June 30, 2025, net sales were $4,312.3 million and net income was $445.3 million, or $4.93 per diluted share.
Cash flow and liquidity remained solid. Net cash provided by operating activities for the first six months was $638.7 millionc, compared with $538.7 million a year earlier, and cash and cash equivalents stood at $787.9 million at June 30, 2025. Long-term debt was $2,475.2 million, and all of the company's debt carried fixed interest rates.
The company expects 2025 capital investments of $840 million to $870 milliond and expects third-quarter earnings, excluding special items, to be higher than second-quarter earnings. The filing also discloses a definitive agreement announced July 1, 2025 to buy the containerboard business of Greif, Inc. for $1.8 billion in cash, which includes two containerboard mills with approximately 800,000 tons of production capacity and eight sheet feeder and corrugated plants; closing is expected by the end of the third quarter, subject to customary conditions including regulatory approval. In addition, on July 29, 2025, the company and seven other containerboard producers were named as defendants in a purported class action alleging antitrust violations, which the company says is without merit.
02—Key points
Key Highlights
- Second-quarter net sales rose to $2,171.3 million from $2,075.3 million, and six-month net sales rose to $4,312.3 million from $4,054.8 million.
- Second-quarter diluted EPS was $2.67 versus $2.21 a year earlier; excluding special items, diluted EPS was $2.48 versus $2.20.
- Packaging segment operating income increased to $346.3 million in the quarter from $279.8 million, driven by higher containerboard and corrugated prices and mix and lower fiber costs.
- Net cash provided by operating activities for the first six months was $638.7 million, up from $538.7 million, and cash and cash equivalents were $787.9 million at June 30, 2025.
- Agreed to acquire the containerboard business of Greif, Inc. for $1.8 billion in cash, expected to close by the end of the third quarter of 2025 subject to regulatory approval.
- Expects third-quarter 2025 earnings, excluding special items, to be higher than second-quarter levels, and 2025 capital expenditures of $840 million to $870 million.
- Named as a defendant in a purported class action filed July 29, 2025 alleging containerboard price-fixing under the Sherman and Clayton Acts; the company believes the claims are without merit.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2025, Packaging Corp. of America kept $0.11.
- Revenue$2.17B100.0%
- Cost of revenue−$1.69B77.8%
- Gross profit$483.0M22.2%
- Operating costs−$149.3M6.9%
- Operating income$333.7M15.4%
- Interest, other & tax−$92.2M4.2%
- Net income$241.5M11.1%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2025filed August 7, 2025Financial Statements
Q2 FY2025 against Q2 FY2024
| Line item | Q2 FY2025Q2 FY2024 | Change |
|---|---|---|
| Revenue | $2.17B$2.08B | +4.6% |
| Cost of Revenue | $1.69B$1.64B | +3.1% |
| Gross Profit | $483.00M$437.70M | +10.3% |
| SG&A Expenses | $153.20M$149.50M | +2.5% |
| Operating Income | $333.70M$276.00M | +20.9% |
| Net Income | $241.50M$198.90M | +21.4% |
| EPS (Basic) | $2.68$2.22 | +20.7% |
| EPS (Diluted) | $2.67$2.21 | +20.8% |
| Shares Outstanding (Basic) | 89.30M89.10M | +0.2% |
| Shares Outstanding (Diluted) | 89.70M89.50M | +0.2% |
05—Questions
Frequently Asked Questions
How did Packaging Corporation of America's profitability change in the second quarter of 2025?
Net income rose to $241.5 million, or $2.67 per diluted share, from $198.9 million, or $2.21 per diluted share, in the second quarter of 2024. Excluding special items, net income was $224.2 million, or $2.48 per diluted share. The increase was driven primarily by higher prices and mix in the Packaging and Paper segments, lower fiber costs, and a lower tax rate, partly offset by higher operating costs and maintenance outage expense.
What is the Greif acquisition and when is it expected to close?
On July 1, 2025, the company agreed to purchase the containerboard business of Greif, Inc. for $1.8 billion in cash. The business includes two containerboard mills with approximately 800,000 tons of production capacity and eight sheet feeder and corrugated plants in the United States. The transaction is expected to close by the end of the third quarter of 2025, subject to customary conditions including regulatory approval, and its results will be included after closing.
How strong is the company's liquidity and balance sheet?
At June 30, 2025, the company had $787.9 million of cash and cash equivalents, $92.4 million of short-term and $75.6 million of long-term marketable debt securities, and $323 million of unused revolving credit capacity net of letters of credit. Long-term debt was $2,475.2 million, and 100% of outstanding debt carried fixed interest rates. Management believes operating cash flow and available capital will be adequate for its requirements for the foreseeable future.
What legal risks did the company disclose?
On July 29, 2025, the company and seven other U.S. and Canadian containerboard producers were named in a purported class action in the Northern District of Illinois alleging conspiracy to raise containerboard prices and restrict capacity in violation of the Sherman and Clayton Acts. The complaint seeks treble damages and attorney's fees. The company believes the allegations are without merit and will defend the suit vigorously. The DeRidder settlement amount has been fully paid as of June 30, 2025.
What does management expect for the third quarter of 2025?
Management expects third-quarter earnings, excluding special items, to be higher than second-quarter earnings. It expects higher corrugated shipments and containerboard production, flat prices and mix in the Packaging segment, and increased Paper production and sales. Maintenance outage expense is expected to be lower because there are no scheduled outages in the quarter, while freight costs will be higher. The outlook does not include any impact from the pending Greif acquisition.
06—Continue