Packaging Corp. of America Reports Decline in Profit

Packaging Corp. of America has announced a decline in profit for the latest quarter due to lower prices in their packaging and paper segments.

In the fourth quarter, the containerboard products producer recorded a net profit of $189.2 million, or $2.10 per share, compared to $211.7 million, or $2.31 per share, during the same period last year.

The company had previously anticipated earnings of $1.76 per share. However, higher operating and converting costs, along with increased recycled fiber prices, seasonal energy expenses, and the restart of its Wallula mill contributed to a higher-than-expected earnings per share of $2.13.

Despite this positive outcome, sales decreased by 2% to $1.94 billion. Nevertheless, this still exceeded analysts’ expectations of $1.9 billion.

Despite lower freight and logistics expenses and higher volumes in the packaging segment, these factors could not offset the impact of pricing.

Shipments per day in the packaging segment saw an increase of 5.1%, while total corrugated products shipments rose by 6.9% compared to the previous year, thanks to an additional shipping day.

Looking ahead, Packaging Corp. anticipates continued growth in the packaging segment for the first quarter of this year.