Packaging Corporation of America (PKG) Q2 2026 earnings summary

Executive summary

• Q2 2026 net income was $192 million ($2.15/share), or $210 million ($2.35/share) excluding special items, on net sales of $2.5 billion, up from $2.2 billion in Q2 2025; legacy business earnings declined, partially offset by Greif acquisition contributions.

• Adjusted EBITDA was $485.7 million, up from $450.8 million year-over-year, driven by higher sales, strong demand, and Greif integration, though impacted by higher freight, labor, and operating costs.

• Corrugated operations achieved record shipments, with overall shipments up 24.3% and legacy business up 4.1%, supported by tight market conditions and price increases.

• Greif acquisition contributed $0.14/share to earnings, exceeding expectations, and integration is progressing ahead of schedule.

• Special items included facility closure costs, Wallula Mill restructuring, and acquisition/integration charges.

Financial highlights

• Q2 2026 net sales: $2.5 billion (+14.7% YoY); net income: $192 million (-20.5% YoY); adjusted EBITDA: $485.7 million (+7.7% YoY); adjusted EPS: $2.35 (down from $2.48); legacy business down $0.27/share, Greif up $0.14/share.

• Packaging segment EBITDA (ex-special items): $489 million on $2.3 billion sales (21.1% margin), up from $453 million on $2 billion sales (22.6% margin) in Q2 2025.

• Paper segment EBITDA (ex-special items): $39 million on $157 million sales (24.9% margin), up from $30 million on $146 million sales (20.8% margin) in Q2 2025.

• Gross margin for Q2 2026 was $512.5 million, up from $483.0 million in Q2 2025.

• Free cash flow was $170 million after $206 million CapEx; cash and equivalents at quarter-end: $666.8 million.

Outlook and guidance

• Q3 2026 adjusted EPS expected at $2.91/share, with continued strong demand in packaging, higher prices, and improved mill performance.

• Lower maintenance outage expenses in packaging, higher in paper segment for Q3.

• Greif's Q3 earnings contribution expected to be slightly lower than Q2 due to outage expenses.

• CapEx forecast for 2026 remains $840-$870 million; DD&A around $710 million.

• Expects higher freight, recycled fiber, chemicals, and electricity costs, but improvement in benefits costs.