Packaging Corporation of America (PKG) Q2 2024 earnings summary

Executive summary

• Q2 2024 net income was $199 million ($2.21 per share), or $2.20 per share excluding special items, down from $209 million ($2.31 per share) in Q2 2023, with special items having minimal impact.

• Net sales rose to $2.1 billion from $2.0 billion year-over-year.

• EBITDA excluding special items was $404 million, down from $418 million in Q2 2023.

• Corrugated products shipments per day rose 9.2% year-over-year, with total shipments up 10.9% due to an extra shipping day.

• Record containerboard production and strong packaging demand, with inventory up 16,000 tons year-over-year.

Financial highlights

• Q2 2024 net sales: $2.1 billion (+6.3% year-over-year); net income: $199 million (down $4 million); diluted EPS: $2.21 (down $0.03).

• Q2 2024 consolidated EBITDA: $404 million (down $14 million); Packaging segment EBITDA (ex-special items): $400 million (down $5 million); Paper segment EBITDA (ex-special items): $31 million (down $8 million).

• Packaging segment Q2 net sales: $1.91 billion (+6.6%); Paper segment: $150 million (+5.1%).

• Q2 2024 gross profit: $438 million (down $7 million year-over-year); operating income: $276 million (down $8 million).

• Capital spending for Q2 2024 was $245 million, up from $126 million in Q2 2023.

Outlook and guidance

• Q3 2024 earnings expected at $2.45 per share, driven by higher prices/mix and containerboard export prices.

• Prices and mix in both packaging and paper segments expected to rise in Q3 as price increases are implemented.

• Corrugated shipments per day expected to strengthen, with potential for a new Q3 record.

• Operating and converting costs anticipated to be higher in Q3 due to seasonal electricity and recycled fiber costs; scheduled outage expenses to be slightly lower.

• Paper volume projected to be slightly lower due to timing of back-to-school business.