Packaging Corp of America third-quarter profit rises to $262 million from $227 million

Packaging Corporation of America (PKG) reported third-quarter net income of $262 million, or $2.93 per share, a regulatory filing showed Wednesday.

Excluding special items, net income was $272 million, or $3.04 per share, compared with $246.7 million, or $2.73 per share, a year earlier.

Net sales rose to $2.6 billion from $2.3 billion a year earlier, the company said in a press release furnished with the filing.

Here's how the company did:

• Diluted earnings per share: $2.93 vs. $2.51 a year earlier
• Diluted EPS excluding special items: $3.04 vs. $2.73 a year earlier
• Net sales: $2,601.7 million vs. $2,313.4 million a year earlier
• Net income: $262.3 million vs. $226.9 million a year earlier
• EBITDA excluding special items: $577.2 million vs. $503.4 million a year earlier

Excluding special items, third-quarter earnings were 13 cents above the company's third-quarter guidance of $2.91 per share.

The acquired Greif operations generated earnings of 13 cents per share in the quarter, compared with a loss of 11 cents a year earlier, the company said.

Excluding special items, earnings per share rose 31 cents from a year earlier. Of that increase, 24 cents came from the acquired Greif operations and 7 cents came from the legacy business.

In the legacy business, favorable price and mix in the Packaging segment added 79 cents per share. Higher production and sales volume in that segment added 12 cents, including more containerboard supplied by the legacy mills to the acquired Greif operations.

Favorable price and mix in the Paper segment added 5 cents, and a lower share count added 2 cents.

Offsetting those gains, higher labor and operating expense cut 28 cents per share and higher freight expense cut 26 cents. Higher corporate and other expense, fiber costs, and depreciation and amortization reduced earnings by 13 cents, 12 cents and 6 cents, respectively.

Packaging segment operating income was $397.8 million, up from $327.5 million a year earlier. Excluding special items, it was $407.7 million compared with $347.9 million.

Paper segment operating income was $29.0 million, down from $35.6 million a year earlier. The company said sales volume in the segment was down 2.5% from the third quarter of 2025.

Total corrugated products shipments were up 10.6% per day and in total compared with the third quarter of 2025. In the legacy packaging business, shipments were down 0.5% per day and in total, with the same number of shipping days in each period.

Containerboard production was 1,489,000 tons. Containerboard inventory rose 34,000 tons from the second quarter of 2026 and fell 29,000 tons from a year earlier.

The company recorded $12.5 million of pre-tax special items in the quarter, or 11 cents per share. They included $6.2 million of facility closure costs, $3.0 million of acquisition and integration costs, $3.0 million of charges related to fire damage at a corrugated products facility, and $0.3 million tied to restructuring at the Wallula, Washington containerboard mill.

For the nine months, net income was $625.3 million, or $6.98 per share, compared with $672.3 million, or $7.45 per share, a year earlier. Those results include $60.0 million of charges related to the announced discontinuation of the No. 2 machine and kraft pulping facilities at the Wallula, Washington containerboard mill.

Chairman and CEO Mark W. Kowlzan said, "We executed very well across all aspects of our operations, resulting in very strong earnings performance for the quarter despite continued cost headwinds from freight, recycled fiber and chemicals and some weakness in agricultural end markets in our corrugated business."

For the fourth quarter, the company expects earnings of $2.81 per share, excluding special items. It expects shipments per day at or around last year's fourth-quarter level, with two fewer shipping days than the third quarter, and total shipments higher than in the third quarter.

Containerboard production will be lower, with maintenance outages at three of the company's mills, and mill maintenance expense will be higher than in the third quarter. Prices for containerboard and corrugated products are expected to improve as the company continues to implement earlier price increases, though corrugated products mix will be seasonally weaker with higher e-commerce volumes.

In the Paper segment, the company expects seasonally lower volume and slightly higher prices. The company expects freight costs to increase as diesel fuel prices rise above third-quarter levels. It also expects higher costs for recycled fiber, wood fiber, chemicals and energy.

The company currently expects acquisition and integration-related costs and costs related to closing corrugated products facilities in the fourth quarter. Additional special items may arise from fourth-quarter events.

Capital spending was $247.3 million in the quarter, up from $192.1 million a year earlier. Cash, cash equivalents and marketable debt securities totaled $761.8 million at quarter end, compared with $806.4 million a year earlier.

Packaging Corporation of America is the third largest producer of containerboard products and a leading producer of uncoated freesheet paper in North America. It operates ten mills and 90 corrugated products plants and related facilities.