Packaging Corp. Of America Profit Surges - Update

(RTTNews) - Packaging Corp. of America (PKG) Tuesday reported a triple-fold jump in fourth-quarter profit, on robust sales and tax benefits, with the results trumping Wall Street estimates. The containerboard and corrugated packaging products maker provided strong guidance for the first quarter.

Investors cheered the news, sending Packaging Corp. shares up to a new high in a year - up about 4 percent to $68.00 in after-hours trade.

Results for the quarter were helped by higher volumes and prices, better product mix as well as the acquisition of Boise Inc. The company acquired Boise for about $2 billion last October.

The Lake Forest, Illinois-based company posted fourth quarter net income of $227 million or $2.33 per share, compared with $61 million or $0.63 per share last year.

Results for the quarter included $1.70 per share of income from the reversal of tax reserves related to alternative energy tax credits, and after-tax costs of $0.41 per share mainly related to the acquisition of Boise.

Excluding items, adjusted earnings for the quarter were $101 million or $1.04 per share, compared with $59 million or $0.61 per share a year ago. On average, eight analysts polled by Thomson Reuters expected earnings of $0.87 per share for the quarter. Analysts' estimates typically exclude special items.

Sales for the fourth quarter surged to $1.26 billion from $736.6 million in the prior year, topping analysts' expectations of $1.23 billion.

Packaging Corp.'s corrugated products shipments for the quarter were up 4.4 percent from last year and were up 24 percent including Boise's partial quarter shipments.

Containerboard production, including Boise, was 803,000 tons, up 151,000 tons over last year.

For the first quarter, the company expect earnings in the range of $1.00 to $1.05 per share, while analysts currently anticipate $0.92 per share.

The company expects to benefit from synergies related to Boise, lower amortization of annual mill outage costs, and higher prices for white papers.

Meanwhile, its largest containerboard mill in Counce, Tennessee will be down for a week in March for maintenance outage which will reduce production and increase costs, along with inclement weather related expenses.

The company's stock closed Tuesday at $65.55, up $0.04 or 0.06%, on a volume of 1.6 million shares on the NYSE. In after hours, the stock gained $2.45 or 3.74% at $68.00. In the past year, the stock trended in the range of $38.91 - $66.50.