Packaging Corp. stock gains 2% on earnings beat, strong demand

NEW YORK - Packaging (NYSE:PKG ) Corporation of America (NYSE:PKG) reported third quarter earnings that exceeded analyst expectations, driven by robust demand and successful price increases, sending its shares up 2.46% in after-hours trading.

The Lake Forest, Illinois-based company posted adjusted earnings per share of $2.65, beating the analyst consensus of $2.49. Revenue rose to $2.18 billion, surpassing estimates of $2.09 billion.

Packaging Corp .'s strong performance was fueled by record demand in its packaging segment. Corrugated products shipments per day increased 11.1% YoY and 5.8% sequentially. Total shipments were up 12.9% YoY with one additional shipping day.

"We had great implementation of our previously announced containerboard and corrugated products price increases," said Mark W. Kowlzan, Chairman and CEO. "Very strong demand throughout the quarter led to all-time quarterly records for containerboard production, total box shipments and shipments per day."

The company's paper segment also performed well, with sales volume up 4% YoY and 5% sequentially. Kowlzan noted that previously announced price increases were implemented as planned.

Looking ahead, Packaging Corp. expects continued strong demand in its packaging segment, with corrugated shipments per day strengthening further. However, total shipments will be impacted by two fewer shipping days and recent hurricane damage to Florida strawberry crops.

The company forecasts fourth quarter earnings of $2.47 per share, slightly below the current quarter's results due to higher seasonal energy costs and increased chemical costs.

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Source: Investing.com