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Packaging Corp. of America 8-K Report, Financial Results (Jan 25, 2024)

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed January 25, 2024
Period End
January 24, 2024
Security
PKG
In the record · 2016–202610-K1110-Q328-K91

PKG filed 11 annual reports (10-K), 32 quarterly reports (10-Q) and 91 current reports (8-K) between 2016 and 2026.

  1. Impairment8-K · Aug ’17Aug ’17
  2. Impairment8-K · Jul ’20Jul ’20
  3. Leadership change8-K · Feb ’22Feb ’22
  4. Leadership change8-K · Mar ’26Mar ’26

01—Abstract

Summary

Summary of the 8-K filed January 25, 2024. Cited figures are marked; the original filing is the authoritative source.

Packaging Corporation of America reported fourth-quarter 2023 net income of $189 milliona, or $2.10 per diluted share, compared with $211.7 million, or $2.31 per share, in the fourth quarter of 2022.

Excluding special items, fourth-quarter net income was $192 millionb, or $2.13 per share. Full-year 2023 net income was $765 million, or $8.48 per share, versus $1.03 billion, or $11.03 per share, in 2022. Excluding special items, full-year net income was $784 million, or $8.70 per share.

Net sales were $1.94 billionc for the fourth quarter of 2023 and $7.8 billion for the full year, compared with $1.98 billion and $8.5 billion in 2022. Fourth-quarter results were $0.37 per share above the company's fourth-quarter guidance of $1.76 per share, driven mainly by higher Packaging volume, lower operating and converting costs and lower freight and logistics expenses. The Packaging segment's full-year segment income was $1,074.3 million, down from $1,423.7 million in 2022, while the Paper segment's full-year segment income rose to $118.9 million from $103.0 million.

Management said demand in the Packaging segment was stronger than expected during the quarter. The company restarted the No. 3 machine at its Wallula, WA mill and plans to restart the No. 2 machine there in the first quarter of 2024. Capital spending was $469.7 milliond for 2023, compared with $824.2 million in 2022, and cash, cash equivalents and marketable debt securities were $1,205.6 million at year-end, up from $470.1 million a year earlier.

For the first quarter of 2024, management expects first-quarter earnings of $1.54 per share. The outlook reflects higher corrugated products shipments, two additional shipping days, lower containerboard volume from the Jackson, AL mill conversion and a scheduled Counce, TN maintenance outage, and higher recycled fiber and energy prices.

The Jackson conversion outage is estimated to reduce first-quarter earnings by $0.16 per share. The filing also notes that the press release contains non-GAAP measures and that special items for the first quarter are expected to include charges related to the paper-to-containerboard conversion at the Jackson, AL mill.

02—Key points

Key Highlights

  1. Q4 2023 net income of $189 million, or $2.10 per diluted share, versus $2.31 per share in Q4 2022; excluding special items, $2.13 per share.
  2. Full-year 2023 net income of $765 million, or $8.48 per diluted share, versus $11.03 per share in 2022; excluding special items, $8.70 per share.
  3. Q4 2023 results were $0.37 per share above the company's fourth-quarter guidance of $1.76 per share.
  4. Full-year net sales of $7.8 billion in 2023 versus $8.5 billion in 2022; Packaging segment income fell to $1,074.3 million from $1,423.7 million.
  5. Packaging shipments per day rose 5.1% in Q4 2023 versus last year's fourth quarter, and total corrugated products shipments rose 6.9% with one extra shipping day.
  6. Capital spending fell to $469.7 million in 2023 from $824.2 million in 2022, and year-end cash and marketable debt securities rose to $1,205.6 million from $470.1 million.
  7. First-quarter 2024 EPS guidance is $1.54 per share, including an estimated $0.16 per share impact from the Jackson, AL mill conversion outage.

03—Questions

Frequently Asked Questions

  1. How did Packaging Corporation of America perform in the fourth quarter of 2023?

    The company reported Q4 2023 net income of $189 million, or $2.10 per diluted share, compared with $211.7 million, or $2.31 per share, in Q4 2022. Excluding special items, Q4 2023 EPS was $2.13, and results beat the company's guidance of $1.76 per share by $0.37.

  2. What drove the full-year 2023 results?

    Full-year 2023 net income was $765 million, or $8.48 per diluted share, versus $11.03 per share in 2022. Net sales were $7.8 billion versus $8.5 billion. Packaging segment income declined to $1,074.3 million from $1,423.7 million, while Paper segment income rose to $118.9 million from $103.0 million.

  3. What is the company's outlook for the first quarter of 2024?

    Management expects first-quarter 2024 earnings of $1.54 per share. It expects higher corrugated products shipments and two additional shipping days, offset by lower containerboard volume from the Jackson, AL conversion and a Counce, TN maintenance outage. The Jackson outage is estimated to reduce earnings by $0.16 per share, and higher recycled fiber and energy costs are expected.

  4. What operational changes is the company making?

    The company restarted the No. 3 machine at its Wallula, WA mill in the fourth quarter and plans to restart the No. 2 machine there in the first quarter of 2024. It is also completing the containerboard conversion of the No. 3 machine at its Jackson, AL mill, which involves the discontinuation of uncoated freesheet paper production on that machine.

  5. How much did the company spend on capital projects and what is its cash position?

    Capital spending was $469.7 million in 2023, down from $824.2 million in 2022. Cash, cash equivalents and marketable debt securities were $1,205.6 million at December 31, 2023, up from $470.1 million a year earlier.

04—Continue

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