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Investing.com -- Packaging Corp of America (NYSE:PKG) reported better-than-expected first quarter earnings and revenue, but shares tumbled 6.4% as the company’s second quarter guidance fell short of analyst estimates.
The packaging and paper products manufacturer posted adjusted earnings per share of $2.31 for Q1 2025, beating the analyst consensus of $2.21. Revenue came in at $2.14 billion, slightly above expectations of $2.12 billion and up 7% YoY.
Total (EPA:TTEF) corrugated products shipments rose 2.5% YoY in Q1. Containerboard production reached 1,250,000 tons, with inventory up 75,000 tons from Q1 2024.
"A new first quarter revenue record was achieved to begin the new year," said Mark W. Kowlzan, Chairman and CEO. "In the Packaging segment we had excellent implementation of our previously announced price increases and, although we began to see some pullback in the middle of the quarter related to the uncertainty created by global trade tensions, box demand was solid."
However, PKG’s outlook for the second quarter disappointed investors. The CEO forecast Q2 EPS of $2.41, well below the $2.65 analysts were expecting.
Looking ahead, Kowlzan noted ongoing economic uncertainty and potential negative impacts from tariffs. The company expects higher domestic prices in Q2 as price increases continue to be implemented, but also higher costs due to planned maintenance outages and rail contract rate increases.
Despite the earnings beat, PKG shares fell sharply in after-hours trading as investors focused on the weaker-than-anticipated Q2 guidance.