Packaging Corp Earnings Miss Estimates in Q4, Sales Increase Y/Y

Packaging Corporation of America PKG reported adjusted earnings per share (EPS) of $2.32 in the fourth quarter of 2025, which missed the Zacks Consensus Estimate of $2.41. The bottom line came below PKG’s guidance and fell 6% year over year. The downside was due to lower volume and mix, as well as unfavorable production and sales volume in the acquired Greif Inc. GEF business. 

Including special items for closure and other costs related to corrugated products facilities, earnings in the quarter were $1.13 per share compared with the prior-year quarter’s $2.45.

Packaging Corp’s Gross Margin Dips Y/Y in Q4

Sales in the fourth quarter rose 10.1% year over year to $2.36 billion. The top line missed the Zacks Consensus Estimate of $2.42 billion.
The cost of products sold rose 14.3% year over year to $1.92 billion. Gross profit fell 4.7% year over year to $448 million. Selling, general and administrative expenses totaled $165 million compared with the prior-year quarter’s $147 million.

Packaging Corp reported an adjusted operating income of $310.2 million, which marked a 2.1% year-over-year increase from $303.9 million in the fourth quarter of 2024.

PKG’s Q4 Segmental Performances

Packaging: Sales in this segment increased 10.8% year over year to $2.19 billion on higher prices and mix. This was offset by lower production and sales volume. The figure missed our estimate of $2.27 billion.

Total corrugated product shipments fell 1.7% year over year. However, including the Greif business, shipments per day were up 17% year over year. Containerboard production was 1,407,000 tons and containerboard inventory rose 84,000 tons from the year-ago quarter, driven by the Greif business buyout.

Adjusted operating profit was $309 million compared with $299 million in the prior-year quarter. Our model had projected the segment’s adjusted operating income to be $386million. 

Paper: The segment’s revenues were $154 million in the October-December quarter, up 1.8% year over year. The metric was lower than our estimate of $153 million. The segment reported an adjusted operating profit of $33 million compared with the year-ago quarter’s $35 million. Our projection for the segment’s adjusted operating income was $41 million. Sales volume rose 1% from the fourth quarter of 2024.

PKG’s FY25 Performance

PKG's adjusted EPS for 2025 was $9.84, which fell short of the Zacks Consensus Estimate of $9.93. Including one-time items, EPS was $8.58 compared with $8.93 in 2024.

Sales for the year were $8.99 billion, which reflected a 7.2% year-over-year increase. The top line missed the consensus estimate of $9.06 billion.

Packaging Corp’s Cash Flow Updates

The company ended 2025 with a cash balance of $668 billion compared with $852 million at the end of 2024.

PKG’s Q1 Outlook

In the Packaging segment, the company expects higher per-day year-over-year volume in its legacy corrugated products plants, along with strength in corrugated operations from the Greif business. The paper segment is expected to face slightly lower volume, and price and mix.

PKG projects a first-quarter 2026 EPS of $2.20.

Packaging Corp Stock’s Price Performance

Packaging Corp’s shares have lost 3.8% in the past year compared with the industry’s decline of 8.6%.

PKG’s Zacks Rank

Packaging Corp currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Packaging Stocks Awaiting Results

AptarGroup, Inc. ATR is scheduled to release fourth-quarter 2025 results on Feb. 5. The Zacks Consensus Estimate for ATR’s fourth-quarter 2025 earnings is pegged at $1.24 per share, indicating a year-over-year dip of 18%.

The consensus estimate for AptarGroup’s top line is pegged at $896.7 million, indicating an increase of 5.7% from the prior year’s actual. ATR has a trailing four-quarter average earnings surprise of 8.1%.

Silgan Holdings SLGN is scheduled to release fourth-quarter 2025 results on Feb. 4. The Zacks Consensus Estimate for SLGN’s fourth-quarter 2025 earnings is pegged at 65 cents per share, indicating a year-over-year dip of 25.5%.

The consensus estimate for Silgan’s top line is pegged at $1.46 billion, indicating an increase of 3.5% from the prior year’s actual. SLGN has a trailing four-quarter average earnings surprise of 1.9%.

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This article originally published on Zacks Investment Research (zacks.com).

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