Packaging Corp. Of America Q2 Profit Rises - Update

(RTTNews) - Packaging Corp. of America (PKG) Tuesday reported an increase in profit for the second quarter, as higher containerboard and corrugated products prices and mix boosted the box maker's top line. Both earnings and revenues for the quarter came in ahead of analysts' estimates.

Packaging Corp.'s second-quarter profit improved to $64.5 million or $0.66 per share from $45.2 million or $0.46 per share last year.

Adjusted earnings for the quarter were $69.5 million or $0.71 per share. On average, 12 analysts polled by Thomson Reuters expected earnings of $0.63 per share for the quarter. Analysts' estimates typically exclude special items.

Packaging Corp. said profit growth was driven by higher containerboard and corrugated products prices and mix, coupled with higher corrugated products sales volume.

Sales climbed 12 percent to $800.2 million from $712.5 million last year. Analysts expected revenues of $770.06 million for the quarter.

Corrugated products shipments per workday were up 5.2 percent from last year, while containerboard production was 629,000 tons, down 9,000 tons from last year's second quarter.

Commenting on the results, Chief Executive Mark Kowlzan said, "We had an outstanding quarter in all aspects of our operations with record earnings driven by higher prices and higher corrugated products volume. Earnings were higher than our second quarter guidance driven by better than forecasted sales volume and price, and lower than forecasted costs."

Looking ahead to the third quarter, the company projects earnings of about $0.88 per share. Analysts currently expect earnings of $0.87 per share for the third quarter.

"We expect higher corrugated products prices, higher sales volume, and with no planned annual outages, increased mill production and lower mill operating costs. We also expect higher purchased electricity costs with summer pricing, higher amortization of annual outage repair costs, and a higher tax rate," Kowlzan said.

PKG closed Tuesday's trading at $51.49, down $0.82 or 1.57%, on the NYSE. The stock, however, gained $1.88 or 3.65% in after-hours trade.