PCA Q2 profits nearly level with year ago

Lake Forest, Illinois-based Packaging Corp. of America (PCA) has reported second-quarter 2024 net income of $199 million on net sales of about $2.07 billion, figures that are not dramatically different from the $1.95 billion in sales from one year ago and the $203 million in net income it earned in the second quarter of 2023.

In its most recently completed quarter, PCA’s packaging business unit, which includes recycled-content board mills, accounted for nearly 92 percent of its revenue, with its uncoated freesheet (office) paper sector comprising most of the rest.

PCA's $2.20 earnings per share for the April to June period was 13 cents per share above its own guidance primarily due to higher volume in the Packaging segment, lower operating and converting costs and lower freight costs.

In its packaging segment, PCA's corrugated products shipments per day were up 9.2 percent over last year’s second quarter and containerboard production was 1.281 million tons.

“Results for the quarter reflect our strong market conditions in the packaging segment," PCA Chair and CEO Mark W. Kowlzan says. "This drove a new all-time containerboard production record in order to service corrugated products and containerboard demand, which grew stronger each month, ending with a new corrugated shipments-per-day record for the month of June.

“Looking ahead as we move from the second and into the third quarter, prices and mix in both our Packaging and Paper segments will move higher as we continue to implement previously announced increases along with higher containerboard export prices.

“With current containerboard inventory below our target levels, we will also attempt to build some inventory ahead of the scheduled maintenance outage at our Deridder [Louisiana] mill in October.”

Kowlzan predicts his firm’s operating and converting costs could trend higher in the second half of the year, citing seasonal electricity usage and prices and slightly higher recycled fiber costs.

PCA is the third-largest producer of containerboard products and produces uncoated freesheet paper in North America. The company operates eight mills and 86 downstream corrugated products plants and related facilities.