What drove the year-over-year increase in earnings?

Excluding special items, the $.60 per share increase was driven primarily by higher volume ($.94) and prices and mix ($.03) in the Packaging segment, higher Paper segment volume ($.03), lower freight and logistics expenses ($.09), lower scheduled outage expenses ($.06), and lower interest expense ($.05). These were partially offset by higher operating and converting costs ($.51), higher depreciation ($.05), lower Paper prices and mix ($.02), and other expenses ($.02).

What does the company expect for the fourth quarter of 2024?

Management expects fourth quarter earnings of $2.47 per share, excluding special items. It expects Packaging demand to stay strong, with shipments per day continuing to strengthen, but total corrugated shipments will be affected by two fewer shipping days and hurricane damage to Florida strawberry crops. Paper shipments will be lower than in the seasonally stronger third quarter, and operating and converting costs are expected to rise.

What were the special items in the third quarter?

Reported third quarter results include special items, primarily closure costs related to certain corrugated products facilities. These items totaled $0.9 million of charges in the three months ended September 30, 2024, and reduced EPS by $.01.

PKG 8-K: Earnings & Results

Q: How did Packaging Corporation of America perform in the third quarter of 2024?

The company reported net income of $238 million, or $2.64 per diluted share, versus $183.2 million, or $2.03 per share, in the third quarter of 2023. Excluding special items, EPS was $2.65 versus $2.05 a year earlier. Net sales were $2.2 billion, up from $1.9 billion.

01—Abstract

Summary

Summary of the 8-K filed October 23, 2024. Cited figures are marked; the original filing is the authoritative source.

Packaging Corporation of America (NYSE: PKG) reported third quarter 2024 net income of $238 million^a, or $2.64 per diluted share, compared with $183.2 million, or $2.03 per share, in the third quarter of 2023.

Excluding special items, net income was $239 million^b, or $2.65 per share. Net sales rose to $2.2 billion from $1.9 billion. The company said the results were $.20 per share above its third quarter guidance of $2.45.

Reported results included special items, primarily closure costs for certain corrugated products facilities. The increase in earnings was driven mainly by higher volume and higher prices and mix in the Packaging segment. Packaging segment operating income was $320.7 million^c, up from $256.8 million, and Paper segment operating income was $38.5 million, up from $27.6 million.

Corrugated products shipments per day were up 11.1% year over year, and containerboard production of 1,293,000 tons was an all-time quarterly record. For the nine months ended September 30, 2024, net income was $584.0 million^d, or $6.48 per diluted share, and capital spending was $468.4 million, compared with $328.6 million a year earlier. For the fourth quarter, management expects demand in the Packaging segment to remain strong, but total corrugated shipments will be reduced by two fewer shipping days and recent hurricane damage to Florida strawberry crops.

Scheduled outage costs are estimated to be $(.12) per share higher than in the third quarter, and operating and converting costs are expected to rise on seasonal energy and chemical costs. Management projects fourth quarter earnings of $2.47 per share, excluding any significant special items.

02—Key points

Key Highlights

Third quarter 2024 net income was $238 million, or $2.64 per diluted share, up from $2.03 per share a year earlier; excluding special items, EPS was $2.65.
Net sales were $2.2 billion in the third quarter of 2024 versus $1.9 billion in the third quarter of 2023.
Results beat the company's third quarter guidance of $2.45 per share by $.20, driven by higher volume in the Packaging and Paper segments and higher Packaging prices and mix.
Packaging segment operating income rose to $320.7 million from $256.8 million, and Paper segment operating income rose to $38.5 million from $27.6 million.
Corrugated products shipments per day increased 11.1% year over year, and containerboard production reached an all-time quarterly record of 1,293,000 tons.
Management guided fourth quarter 2024 earnings to $2.47 per share, citing two fewer shipping days, hurricane damage to Florida strawberry crops, and $(.12) per share of higher scheduled outage costs.
Cash, cash equivalents, and marketable debt securities were $841.3 million at September 30, 2024, and nine-month capital spending was $468.4 million.

03—Questions

Frequently Asked Questions

How did Packaging Corporation of America perform in the third quarter of 2024?
The company reported net income of $238 million, or $2.64 per diluted share, versus $183.2 million, or $2.03 per share, in the third quarter of 2023. Excluding special items, EPS was $2.65 versus $2.05 a year earlier. Net sales were $2.2 billion, up from $1.9 billion.
What drove the year-over-year increase in earnings?
Excluding special items, the $.60 per share increase was driven primarily by higher volume ($.94) and prices and mix ($.03) in the Packaging segment, higher Paper segment volume ($.03), lower freight and logistics expenses ($.09), lower scheduled outage expenses ($.06), and lower interest expense ($.05). These were partially offset by higher operating and converting costs ($.51), higher depreciation ($.05), lower Paper prices and mix ($.02), and other expenses ($.02).
What does the company expect for the fourth quarter of 2024?
Management expects fourth quarter earnings of $2.47 per share, excluding special items. It expects Packaging demand to stay strong, with shipments per day continuing to strengthen, but total corrugated shipments will be affected by two fewer shipping days and hurricane damage to Florida strawberry crops. Paper shipments will be lower than in the seasonally stronger third quarter, and operating and converting costs are expected to rise.
What were the special items in the third quarter?
Reported third quarter results include special items, primarily closure costs related to certain corrugated products facilities. These items totaled $0.9 million of charges in the three months ended September 30, 2024, and reduced EPS by $.01.

04—Continue

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