01—Abstract
Summary
Summary of the 8-K filed January 29, 2025. Cited figures are marked; the original filing is the authoritative source.
Packaging Corporation of America (NYSE: PKG) reported fourth quarter 2024 net income of $221 milliona, or $2.45 per diluted share, and $222 million, or $2.47 per share, excluding special items.
Fourth quarter net sales were $2.1 billionb in 2024 versus $1.9 billion in 2023. For the full year 2024, net income was $805 million, or $8.93 per share, and $814 million, or $9.04 per share excluding special items, on net sales of $8.4 billion compared with $7.8 billion in 2023. The company attributed the $.34 per share increase in fourth quarter earnings excluding special items primarily to higher prices and mix and volume in the Packaging segment, partially offset by higher operating costs.
Operationally, the Packaging segment showed strong demand, with total corrugated product shipments and shipments per day up 9.1% versus last year's fourth quarter and containerboard inventory up 54,000 tons from the fourth quarter of 2023. Management described record fourth quarter total shipments and an all-time record shipments per day, along with new annual records for shipments and mill production. Full year 2024 Packaging segment operating income was $1,101.5 millionc, and Paper segment operating income was $129.7 million.
Looking ahead, management expects first quarter 2025 earnings of $2.21d per share. The company cited higher domestic containerboard prices, new first quarter shipment records expected in corrugated products plants, lower containerboard volume from two fewer operating days and scheduled mill maintenance outages at the Counce, TN and Valdosta, GA mills, and expected price inflation across most cost categories, including higher labor, wood, energy and chemical costs. The results were disclosed in a press release furnished as Exhibit 99.1, and the Item 2.02 information is furnished rather than filed.
02—Key points
Key Highlights
- Q4 2024 net income of $221 million ($2.45 per diluted share); $222 million ($2.47 per share) excluding special items
- Full year 2024 net income of $805 million ($8.93 per diluted share); $814 million ($9.04 per share) excluding special items
- Q4 2024 net sales of $2.1 billion versus $1.9 billion in Q4 2023; full year 2024 net sales of $8.4 billion versus $7.8 billion in 2023
- Packaging segment Q4 2024 corrugated shipments and shipments per day up 9.1% year over year, with record Q4 total shipments and an all-time record shipments per day
- Full year 2024 Packaging segment operating income of $1,101.5 million versus $1,074.3 million in 2023; Paper segment operating income of $129.7 million versus $118.9 million
- First quarter 2025 earnings guidance of $2.21 per share, with higher domestic containerboard prices and lower containerboard volume from two fewer operating days and maintenance outages
- Cash, cash equivalents, and marketable debt securities of $852.2 million at December 31, 2024, down from $1,205.6 million a year earlier; capital spending of $669.7 million for the full year 2024 versus $469.7 million in 2023
03—Questions
Frequently Asked Questions
How did Packaging Corporation of America perform in the fourth quarter of 2024?
The company reported fourth quarter 2024 net income of $221 million, or $2.45 per diluted share, compared with $189.2 million, or $2.10 per share, in the fourth quarter of 2023. Excluding special items, diluted EPS was $2.47 versus $2.13 a year earlier. Management attributed the $.34 per share increase primarily to higher prices and mix and volume in the Packaging segment.
What is the company's earnings outlook for the first quarter of 2025?
Management expects first quarter 2025 earnings of $2.21 per share, excluding special items, which it says it does not currently expect to include any significant special items for. The outlook reflects higher domestic containerboard prices and an improved product mix, offset by higher labor, wood, energy and chemical costs, rail rate increases at three mills, and higher depreciation.
What drove demand and volume in the Packaging segment?
Management said demand in the Packaging segment remained very strong during the quarter. Total corrugated product shipments and shipments per day were up 9.1% versus the fourth quarter of 2023, and shipments per day were up 3.2% versus the third quarter of 2024. Containerboard production reached 1,310,000 tons, and containerboard inventory rose 54,000 tons year over year.
How did full-year 2024 results compare with 2023?
Full year 2024 net income was $805 million, or $8.93 per diluted share, versus $765.2 million, or $8.48 per share, in 2023. Excluding special items, diluted EPS was $9.04 compared with $8.70. Net sales rose to $8.4 billion from $7.8 billion, and income from operations was $1,101.3 million compared with $1,075.1 million.
What special items affected reported results?
Fourth quarter 2024 results included special items for closure and other costs related to corrugated products facilities. Full year 2024 special items were primarily for closure and other costs related to corrugated products facilities and design centers, and for costs at the Jackson, Alabama mill related to paper-to-containerboard conversion activities, which totaled $12.4 million pre-tax.
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