PCA boosts its earnings

Lake Forest, Illinois-based Packaging Corp.of America (PCA) has reported second-quarter 2022 net income of $301 million, or $3.20 per share. That represents a 45 percent leap in net income compared with the second quarter of last year.

Sales for the paper and board producer checked in at $2.2 billion in this year’s second quarter, representing a 15.8 percent rise from last year’s and $1.9 billion.

The company says its earnings are slightly less (from $3.23 per share to $3.20) because of “special items primarily for certain costs at the Jackson, Alabama, mill for paper-to-containerboard conversion related activities.”

Mark W. Kowlzan, board chair and CEO of PCA, comments, “Results for the quarter were excellent as we once again improved our margins while continuing to experience significant cost inflation across the company as well as various supply chain challenges. We had great execution of our previously announced price increases in both the Packaging and Paper segments.”

He continues, “Demand in our Packaging segment was solid with corrugated demand flat with last year’s record second quarter, which was up almost 10 percent versus the prior year, along with demand out of our containerboard mills generating new second quarter production and sales volume records.”

Heading into the next quarter’s potential results, Kowlzan says, “in our Packaging segment, although the majority of our previously announced price increases were recognized in the second quarter, the remaining portion will be implemented during the third quarter. In our Paper segment, we will continue implementing our previously announced price increases, and earlier today we notified customers of an additional $60 per ton price increase on all paper grades, effective with shipments beginning Sept. 6.”

PCA describes itself as the third-largest producer of containerboard products and a leading producer of uncoated freesheet paper in North America. PCA operates eight mills and 90 corrugated products plants and related facilities. According to its 2021 Responsibility Report, PCA consumed 1.2 million tons of recovered fiber last year, representing a 20.7 percent jump from its 2020 volume.