01—Abstract
Summary
Summary of the 10-Q filed August 7, 2026. Cited figures are marked; the original filing is the authoritative source.
Packaging Corporation of America (PCA) reported second-quarter 2026 net sales of $2.49 billiona, up from $2.17 billion in the second quarter of 2025, and net income of $192.1 million, or $2.15 per diluted share, compared with $241.5 million, or $2.67 per diluted share, a year earlier.
Excluding special items, net income was $210.1 millionb, or $2.35 per diluted share, versus $224.2 million, or $2.48 per diluted share, in the prior-year quarter. The filing attributes the earnings decline in the legacy business to higher freight costs, unfavorable price and mix in the Packaging segment, higher labor and operating costs, higher depreciation and amortization, higher fiber costs, a higher tax rate and higher interest expense, partly offset by higher volumes, lower maintenance outage expense and a $0.14 per share contribution from the acquired Greif containerboard business. For the six months ended June 30, 2026, net sales were $4.86 billion and net income was $363.0 million, or $4.05 per diluted share, versus $445.3 million, or $4.93 per diluted share, a year earlier.
Interest expense, net rose to $66.0 millionc from $26.0 million, reflecting financing for the Greif Acquisition completed on September 2, 2025 for $1.8 billion in cash. Cash flow from operations was $705.3 million for the six months, and capital expenditures were $370.6 million; the company expects 2026 capital investments of $840 million to $870 million. At June 30, 2026, cash and cash equivalents were $442.8 million and long-term debt was $3.97 billion.
Management expects third-quarter 2026 earnings, excluding special items, to be higher than the second quarter, citing expected price and mix improvement from two Packaging price increases, one additional shipping day, and fewer mills with annual outages, while noting that freight costs are expected to remain elevated. The filing also discloses a pending class action lawsuit (Artuso Pastry Foods Corp v. Packaging Corporation of America, et al.) alleging containerboard price-fixing, which PCA says is without merit.
02—Key points
Key Highlights
- Second-quarter 2026 net sales rose to $2,489.9 million from $2,171.3 million, with Packaging net sales up $305.4 million, including $258 million from the acquired business.
- Second-quarter net income was $192.1 million ($2.15 per diluted share) versus $241.5 million ($2.67 per diluted share) in 2025; excluding special items, net income was $210.1 million ($2.35 per diluted share) versus $224.2 million ($2.48).
- Six-month income from operations fell to $542.5 million from $614.0 million, with $83 million of special items expense tied to Wallula mill restructuring, facility closures and acquisition costs.
- Interest expense, net increased to $66.0 million for the six months from $26.0 million, driven by financing for the $1.8 billion Greif Acquisition.
- Wallula, Washington mill restructuring: the No. 2 paper machine and kraft pulping facilities were permanently shut down, with approximately $187.7 million of total pre-tax restructuring charges expected, of which $59.7 million was recorded in the first six months of 2026.
- Capital expenditures for 2026 are expected in a range of $840 million to $870 million, and the company raised its quarterly dividend to $1.50 per share from $1.25 per share.
- Management expects third-quarter 2026 earnings, excluding special items, to be higher than the second quarter of 2026.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2026, Packaging Corp. of America kept $0.08.
- Revenue$2.49B100.0%
- Cost of revenue−$1.98B79.4%
- Gross profit$512.5M20.6%
- Operating costs−$221.3M8.9%
- Operating income$291.2M11.7%
- Interest, other & tax−$99.1M4.0%
- Net income$192.1M7.7%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2026filed August 7, 2026Financial Statements
Q2 FY2026 against Q2 FY2025
| Line item | Q2 FY2026Q2 FY2025 | Change |
|---|---|---|
| Revenue | $2.49B$2.17B | +14.7% |
| Cost of Revenue | $1.98B$1.69B | +17.1% |
| Gross Profit | $512.50M$483.00M | +6.1% |
| SG&A Expenses | $179.30M$153.20M | +17.0% |
| Operating Income | $291.20M$333.70M | −12.7% |
| Net Income | $192.10M$241.50M | −20.5% |
| EPS (Basic) | $2.16$2.68 | −19.4% |
| EPS (Diluted) | $2.15$2.67 | −19.5% |
| Shares Outstanding (Basic) | 88.50M89.30M | −0.9% |
| Shares Outstanding (Diluted) | 89.00M89.70M | −0.8% |
05—Questions
Frequently Asked Questions
How did PCA's earnings change in the second quarter of 2026?
Net income was $192.1 million, or $2.15 per diluted share, versus $241.5 million, or $2.67 per diluted share, in the second quarter of 2025. Excluding special items, earnings were $2.35 per diluted share versus $2.48, with the filing citing higher freight costs, unfavorable Packaging price and mix, higher labor and operating costs, and higher interest expense, partly offset by volume growth and the Greif business.
What drove the increase in net sales?
Packaging net sales rose $305.4 million to $2,311.3 million in the second quarter, primarily from $258 million of higher volume from the acquired Greif business and $58 million of higher legacy volume, partly offset by $11 million of lower prices and mix. Corrugated products shipments were up 24.3% per day and in total versus the prior-year quarter.
What is the outlook for the rest of 2026?
Management expects third-quarter 2026 earnings, excluding special items, to be higher than the second quarter. Drivers include the realization of the first containerboard and corrugated price increase, a second price increase partly in the third and fourth quarters, one more shipping day, and lower maintenance outage impact. Freight costs are expected to stay at or around elevated levels and be higher on average in the third quarter.
What legal proceedings does the company face?
PCA and seven other U.S. and Canadian containerboard producers were named in a purported class action, Artuso Pastry Foods Corp v. Packaging Corporation of America, et al., filed July 29, 2025 in the U.S. District Court for the Northern District of Illinois. It alleges Sherman Act and Clayton Act violations related to conspiring to raise containerboard prices, and seeks treble damages. PCA believes the allegations are without merit and will defend the suit vigorously.
06—Continue