Industrial Packaging Stocks Q2 Teardown: Packaging Corporation of America (NYSE:PKG) Vs The Rest

The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Packaging Corporation of America (NYSE:PKG) and the rest of the industrial packaging stocks fared in Q2.

Industrial packaging companies have built competitive advantages from economies of scale that lead to advantaged purchasing and capital investments that are difficult and expensive to replicate. Recently, eco-friendly packaging and conservation are driving customers preferences and innovation. For example, plastic is not as desirable a material as it once was. Despite being integral to consumer goods ranging from beer to toothpaste to laundry detergent, these companies are still at the whim of the macro, especially consumer health and consumer willingness to spend.

The 8 industrial packaging stocks we track reported a mixed Q2. As a group, revenues beat analysts’ consensus estimates by 1.6%.

While some industrial packaging stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 3.8% since the latest earnings results.

Packaging Corporation of America (NYSE:PKG)

Founded in 1959, Packaging Corporation of America (NYSE: PKG) produces containerboard and corrugated packaging products as well as displays and package protection.

Packaging Corporation of America reported revenues of $2.17 billion, up 4.6% year on year. This print fell short of analysts’ expectations by 0.8%. Overall, it was a slower quarter for the company with a significant miss of analysts’ sales volume estimates.

Commenting on reported results, Mark W. Kowlzan, Chairman and CEO, said, “We operated very well during the quarter, delivering strong earnings and cash flows as well as higher margins in the Packaging segment. Pricing in the Packaging segment was consistent with expectations as we fully realized our earlier announced price increases. Despite cautious ordering patterns from customers, corrugated products volume was solid and steady throughout the quarter, with per day shipments exceeding the second quarter of 2024 and the first quarter of 2025. As expected, export containerboard sales were lower. We ran our containerboard mills to meet demand and drew down inventory to end at targeted levels. The Paper segment delivered another profitable quarter with strong margin performance, as we realized our earlier price increases. We continued to successfully manage costs across all of our operations, executing our capital projects and efficiency initiatives, which have helped offset inflation.”

Interestingly, the stock is up 4.8% since reporting and currently trades at $216.23.

Read our full report on Packaging Corporation of America here, it’s free.

Best Q2: Ball (NYSE:BALL)

Started with a $200 loan in 1880, Ball (NYSE:BLL) manufactures aluminum packaging for beverages, personal care, and household products as well as aerospace systems and other technologies.

Ball reported revenues of $3.34 billion, up 12.8% year on year, outperforming analysts’ expectations by 7%. The business had an exceptional quarter with an impressive beat of analysts’ organic revenue estimates and a solid beat of analysts’ adjusted operating income estimates.

Ball pulled off the biggest analyst estimates beat among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 8.2% since reporting. It currently trades at $52.93.

Is now the time to buy Ball? Access our full analysis of the earnings results here, it’s free.

Weakest Q2: International Paper (NYSE:IP)

Established in 1898, International Paper (NYSE:IP) produces containerboard, pulp, paper, and materials used in packaging and printing applications.

International Paper reported revenues of $6.77 billion, up 42.9% year on year, exceeding analysts’ expectations by 1.9%. Still, it was a softer quarter as it posted a significant miss of analysts’ adjusted operating income estimates and a significant miss of analysts’ EBITDA estimates.

As expected, the stock is down 8.8% since the results and currently trades at $48.96.

Read our full analysis of International Paper’s results here.

Graphic Packaging Holding (NYSE:GPK)

Founded in 1991, Graphic Packaging (NYSE:GPK) is a provider of paper-based packaging solutions for a wide range of products.

Graphic Packaging Holding reported revenues of $2.20 billion, down 1.5% year on year. This result surpassed analysts’ expectations by 2.1%. It was a very strong quarter as it also produced a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ adjusted operating income estimates.

Graphic Packaging Holding had the slowest revenue growth and weakest full-year guidance update among its peers. The stock is down 4.1% since reporting and currently trades at $22.19.

Read our full, actionable report on Graphic Packaging Holding here, it’s free.

Sealed Air (NYSE:SEE)

Founded in 1960, Sealed Air Corporation (NYSE: SEE) specializes in the development and production of protective and food packaging solutions, serving a variety of industries.

Sealed Air reported revenues of $1.34 billion, flat year on year. This number topped analysts’ expectations by 1.9%. Overall, it was a very strong quarter as it also put up a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ adjusted operating income estimates.

Sealed Air scored the highest full-year guidance raise among its peers. The stock is up 11.1% since reporting and currently trades at $32.23.

Read our full, actionable report on Sealed Air here, it’s free.

Market Update

As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.

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