01—Abstract
Summary
Summary of the 10-Q filed November 6, 2025. Cited figures are marked; the original filing is the authoritative source.
Packaging Corporation of America reported third-quarter 2025 net sales of $2.31 billiona, up from $2.18 billion a year earlier, and net income of $226.9 million, or $2.51 per diluted share, compared with $238.1 million, or $2.64 per diluted share, in the third quarter of 2024.
Excluding special items, net income was $246.7 millionb, or $2.73 per diluted share. Results were driven by higher containerboard and corrugated prices and mix, partially offset by lower legacy volume, higher operating costs and higher interest expense. For the first nine months of 2025, net sales were $6.63 billion and net income was $672.3 million, or $7.45 per diluted share.
The quarter was dominated by the September 2, 2025 acquisition of the containerboard business of Greif, Inc. for $1.8 billionc in cash, which adds two containerboard mills with approximately 800,000 tons of production capacity and eight sheet feeder and corrugated plants. The purchase was financed with $1.5 billion of net debt proceeds, including $500 million of 5.20% senior notes due 2035 and $1.0 billion of term loans, and total long-term debt rose to $3.97 billion from $2.47 billion at December 31, 2024. Net cash provided by operating activities was $1.11 billion for the nine months, compared with $866 million a year earlier.
Management expects fourth-quarter earnings to be lower than the third quarter of 2025, citing a scheduled DeRidder maintenance outage, seasonally lower prices and volumes, and continued Massillon mill outage effects. The company also faces a newly filed purported class action alleging containerboard price-fixing, which it says is without merit and will be defended vigorously.
02—Key points
Key Highlights
- Third-quarter net sales rose to $2.31 billion from $2.18 billion, and diluted EPS was $2.51 versus $2.64, or $2.73 excluding special items.
- Nine-month net income was $672.3 million, or $7.45 per diluted share, compared with $584.0 million, or $6.48 per diluted share, a year earlier.
- The Greif containerboard acquisition closed September 2, 2025 for $1.8 billion in cash, adding two mills with about 800,000 tons of capacity.
- Total long-term debt increased to $3.97 billion at September 30, 2025 from $2.47 billion at December 31, 2024, with a 5.20% senior notes issuance and $1.0 billion in new term loans.
- Packaging segment operating income rose to $328 million in the quarter from $321 million, and Packaging EBITDA excluding special items was $492 million versus $446 million.
- Management expects fourth-quarter earnings to be lower than the third quarter of 2025 due to a DeRidder maintenance outage and continued Massillon mill outage.
- A purported class action filed July 29, 2025 names PCA and seven other containerboard producers, alleging Sherman Act and Clayton Act violations, and the company believes the claims are without merit.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2025, Packaging Corp. of America kept $0.10.
- Revenue$2.31B100.0%
- Cost of revenue−$1.81B78.2%
- Gross profit$504.3M21.8%
- Operating costs−$179.8M7.8%
- Operating income$324.5M14.0%
- Interest, other & tax−$97.6M4.2%
- Net income$226.9M9.8%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2025filed November 6, 2025Financial Statements
Q3 FY2025 against Q3 FY2024
| Line item | Q3 FY2025Q3 FY2024 | Change |
|---|---|---|
| Revenue | $2.31B$2.18B | +6.0% |
| Cost of Revenue | $1.81B$1.68B | +7.9% |
| Gross Profit | $504.30M$505.20M | −0.2% |
| SG&A Expenses | $154.30M$162.00M | −4.8% |
| Operating Income | $324.50M$327.10M | −0.8% |
| Net Income | $226.90M$238.10M | −4.7% |
| EPS (Basic) | $2.52$2.65 | −4.9% |
| EPS (Diluted) | $2.51$2.64 | −4.9% |
| Shares Outstanding (Basic) | 89.40M89.10M | +0.3% |
| Shares Outstanding (Diluted) | 89.70M89.50M | +0.2% |
05—Questions
Frequently Asked Questions
What drove the decline in third-quarter net income?
Net income fell to $226.9 million from $238.1 million. The filing attributes higher operating costs, lower legacy volumes, higher depreciation, higher freight and fixed expenses, and higher interest expense, partly offset by higher containerboard and corrugated prices and mix. Special items of $20 million in the Packaging segment, mostly related to the Greif acquisition, also weighed on results.
How was the Greif acquisition financed?
The company issued $500 million of 5.20% senior notes due 2035 in August 2025 and fully drew $500 million three-year and $500 million seven-year term loans under new credit agreements on September 2, 2025, plus cash on hand. The net debt proceeds totaled $1.49 billion.
What is the outlook for the fourth quarter?
Management expects fourth-quarter earnings to be lower than the third quarter of 2025. It cites a DeRidder maintenance outage in October with higher maintenance expenses, lower Packaging prices from a less favorable mix, seasonally higher energy and fiber costs, and continued Massillon mill outage effects. It expects the acquired business's results to improve and expects Riverville mill to benefit from a full quarter of operations.
What legal exposure does the company disclose?
The company was named in a purported class action filed July 29, 2025 in the U.S. District Court for the Northern District of Illinois with seven other containerboard producers. The suit alleges a conspiracy to raise containerboard prices and seeks treble damages. PCA believes the allegations are without merit. The DeRidder settlement amount has been paid as of September 30, 2025.
How much liquidity does the company have?
At September 30, 2025, the company had $634 million of cash and cash equivalents, $172 million of marketable debt securities, and $573 million of unused borrowing capacity under its revolving credit facility, net of letters of credit. Management believes these sources, together with operating cash flow, are adequate for liquidity and capital requirements for the foreseeable future.
06—Continue