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Investing.com -- Packaging Corporation of America (NYSE:PKG) shares tumbled 6.6% in after-hours trading Wednesday after the company reported third-quarter earnings that fell short of analyst expectations, despite revenue meeting projections.
The third-largest containerboard producer in North America reported adjusted earnings of $2.73 per share for the third quarter, missing analyst estimates of $2.82. Revenue came in at $2.31 billion, in line with consensus projections and up 6% YoY from $2.18 billion in the same quarter last year.
The earnings miss and subsequent stock decline came despite a modest improvement in the company’s core business. Excluding special items, PKG’s third-quarter earnings increased by $0.08 per share compared to the same period last year, driven primarily by higher prices and improved mix in the Packaging segment.
"We had a very strong quarter in the legacy PCA packaging business, with corrugated volume continuing to reflect cautious ordering patterns and improving throughout the quarter, with volume and price largely on plan," said Mark W. Kowlzan, Chairman and CEO of Packaging Corporation of America.
The company’s results were negatively impacted by its recent acquisition of Greif’s containerboard business, which reduced earnings by $0.11 per share in its first month of ownership. PKG completed the acquisition on September 2 and immediately took extended outages at both acquired mills, resulting in lower production and higher maintenance expenses.
Looking ahead, PKG expects fourth-quarter earnings of $2.40 per share, excluding special items. The company anticipates higher per-day corrugated shipments despite three fewer shipping days than the third quarter, along with higher export containerboard sales and seasonally higher energy and fiber costs.
Total corrugated products shipments from PKG’s legacy business decreased 2.7% per day compared to the third quarter of 2024, but including the acquired business, shipments increased 3.7% per day.
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