Packaging Corporation of America Reports Fourth Quarter and Full Year 2024 Results

Packaging Corporation of America (NYSE: PKG) today reported fourth quarter 2024 net income of $221 million, or $2.45 per share, and net income of $222 million, or $2.47 per share, excluding special items. Fourth quarter net sales were $2.1 billion in 2024 and $1.9 billion in 2023. Full year 2024 net income was $805 million, or $8.93 per share, and net income of $814 million, or $9.04 per share, excluding special items. Full year net sales were $8.4 billion in 2024 and $7.8 billion in 2023.

Reported earnings in the fourth quarter include special items for closure and other costs related to corrugated products facilities. Reported earnings for the full year 2024 include special items primarily for closure and other costs related to corrugated products facilities and design centers and certain costs at the Jackson, AL mill for paper-to-containerboard conversion related activities.

Excluding special items, the $.34 per share increase in fourth quarter 2024 earnings compared to the fourth quarter of 2023 was driven primarily by higher prices and mix $.52 and volume $.40 in the Packaging segment, higher prices and mix $.02 and volume $.02 in the Paper segment, and lower freight and logistics expenses $.06. These items were partially offset by higher operating costs ($.48), higher scheduled maintenance outage expenses ($.08), higher depreciation expense ($.06), and higher other expenses ($.06). Results for the quarter were equal to fourth quarter guidance.

Financial information by segment is summarized below and in the schedules with this release.

In the Packaging segment, total corrugated product shipments and shipments per day were up 9.1% versus last year’s fourth quarter. Shipments per day were up 3.2% versus the third quarter of 2024. Containerboard production was 1,310,000 tons, and containerboard inventory was up 54,000 tons from the fourth quarter of 2023 and up 61,000 tons compared to the third quarter of 2024. In the Paper segment, sales volume was up 5% compared to the fourth quarter of 2023 and down 5% from the seasonally stronger third quarter of 2024.

Commenting on reported results, Mark W. Kowlzan, Chairman and CEO, said, “As we have seen throughout the year, demand in our Packaging segment during the quarter remained very strong. Our corrugated products plants delivered record fourth quarter total shipments and an all-time record shipments per day. The plants also set new annual records for total shipments and shipments per day. Excellent operations throughout our mill containerboard system set new quarterly and annual production records as well. This allowed us to meet our customer’s demand needs in a timely manner as well as achieve year-end inventory targets ahead of the mill outages scheduled for the first half of 2025. Although seasonally slower, volume and price/mix in the Paper segment were above last year’s levels. Throughout the Company, our employees together with the benefits of our capital spending program continued to do a great job to lessen the inflationary impact across most of our cost structure.”

“Looking ahead as we move from the fourth and into the first quarter,” Mr. Kowlzan continued, “in our Packaging segment, although seasonally slower, we expect volume in our corrugated products plants to set new first quarter records for total shipments and shipments-per-day. Containerboard volume will be lower with two less operating days and scheduled maintenance outages at our Counce, TN and Valdosta, GA mills. Domestic prices will be higher with an improved product mix together with our previously announced price increases. Export prices are assumed to be stable. In our Paper segment, we forecast slightly lower volume with two less mill operating days and prices and mix to be fairly flat. With the exception of recycled fiber prices, we expect price inflation across most of our direct, indirect and fixed operating and converting costs along with a higher cost mix of mill operations. In addition, wood, energy, and chemical costs will also increase due to the unusually cold seasonal weather negatively impacting usages and yields for these items. Labor and benefits costs will be higher due to timing-related items that occur at the beginning of a new year for annual increases, the restart of payroll taxes, and share-based compensation expenses. First quarter rail rate increases at three of our mills will impact freight and logistics expenses and we expect higher depreciation expense. Lastly, scheduled outage expenses should be slightly lower and we assume a lower corporate tax rate. Considering these items, we expect first quarter earnings of $2.21 per share.”

We present our earnings expectation for the upcoming quarter excluding special items as special items are difficult to predict and quantify and may reflect the effect of future events. We do not currently expect any significant special items during the first quarter; however, additional special items may arise due to first quarter events.

PCA is the third largest producer of containerboard products and a leading producer of uncoated freesheet paper in North America. PCA operates eight mills and 86 corrugated products plants and related facilities.

Some of the statements in this press release are forward-looking statements. Forward-looking statements include statements about our future earnings and financial condition, expected benefits from acquisitions and restructuring activities, our industry and our business strategy. Statements that contain words such as “will”, “should”, “anticipate”, “believe”, “expect”, “intend”, “estimate”, “hope” or similar expressions, are forward-looking statements. These forward-looking statements are based on the current expectations of PCA. Because forward-looking statements involve inherent risks and uncertainties, the plans, actions and actual results of PCA could differ materially. Among the factors that could cause plans, actions and results to differ materially from PCA’s current expectations include the following: the impact of general economic conditions; conditions in the paper and packaging industries, including competition, product demand and product pricing; fluctuations in wood fiber and recycled fiber costs; fluctuations in purchased energy costs; the possibility of unplanned outages or interruptions at our principal facilities; and legislative or regulatory requirements, particularly concerning environmental matters, as well as those identified under Item 1A. Risk Factors in PCA’s Annual Report on Form 10-K for the year ended December 31, 2023, and in subsequent quarterly reports on Form 10-Q, filed with the Securities and Exchange Commission and available at the SEC’s website at “www.sec.gov”.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250128391014/en/