Production and Sales Performance - In 2024, the Packaging segment produced 294 billion square feet (BSF) of containerboard, an increase from 265.4 BSF in 2023, representing a growth of approximately 10.8%[19]. - Corrugated products shipments reached 66.9 BSF in 2024, up from 60.5 BSF in 2023, indicating a year-over-year increase of about 10.6%[17]. - UFS production for 2024 totaled 499 thousand tons, compared to 472 thousand tons in 2023, reflecting a growth of approximately 5.7%[17]. - The total annual containerboard capacity was approximately 301 BSF as of December 31, 2024[20]. - Total corrugated products shipments increased by 10.5% for the year, with containerboard production at approximately 294 billion square feet (BSF)[132]. - Containerboard export shipments increased by 15.4% compared to 2023, indicating strong demand in international markets[136]. Financial Performance - Net sales for the year ended December 31, 2024, were $8.4 billion, up from $7.8 billion in 2023, representing a 7.7% increase[130]. - Net income for 2024 was $805 million, or $8.93 per diluted share, compared to $765 million, or $8.48 per diluted share, in 2023, reflecting a 5.2% increase in earnings per share[130]. - Packaging segment operating income increased to $1,102 million in 2024 from $1,074 million in 2023, with segment EBITDA excluding special items rising to $1,598 million from $1,556 million[131]. - Paper segment operating income rose to $130 million in 2024 from $119 million in 2023, with segment EBITDA excluding special items increasing to $154 million from $151 million[135]. - Income from operations increased by $26 million, or 2.4%, to $1,101 million in 2024, including $12 million of special items compared to $25 million in 2023[147]. - Gross profit increased by $84 million in 2024, primarily due to higher volumes and lower freight expenses, despite challenges from lower prices and higher operating costs[144]. - EBITDA for 2024 was $1,626.9 million, up from $1,592.8 million in 2023, indicating improved operational performance[192]. - Comprehensive income for 2024 was $832.6 million, compared to $796.7 million in 2023, showing an increase of 4.5%[211]. Cost Management and Expenses - In 2024, the total company costs, including cost of sales (COS) and selling, general, and administrative expenses (SG&A), amounted to $7.2 billion, with cash costs at $6.6 billion[99]. - A 1% increase in COS and SG&A costs would result in an additional $72 million in total costs and $66 million in cash costs[99]. - A $10 per ton price increase in recycled fiber would lead to approximately $10 million in additional expenses based on 2024 consumption[81]. - A $0.10 per million MMBTU increase in natural gas prices would result in approximately $3 million of additional expense based on 2024 usage[82]. - The company spent $60 million on environmental compliance in 2024, up from $50 million in both 2023 and 2022[174]. Sustainability and Environmental Practices - In 2024, 21% of containerboard production utilized recycled fiber, highlighting the company's commitment to sustainable practices[27]. - The company aims to reduce absolute Scope 1 and 2 greenhouse gas emissions by 35% by 2030 from a 2021 baseline and achieve net-zero carbon emissions by 2050[179]. - The company maintained an environmental reserve of $25.8 million for ongoing and anticipated remedial projects as of December 31, 2024[177]. Labor and Workforce Management - As of December 31, 2024, the company had approximately 15,400 employees, including 4,300 salaried and 11,100 hourly employees, with about 60% of hourly employees working under collective bargaining agreements[57]. - The company experienced no work stoppages in 2024 and believes it has satisfactory labor relations with its employees[57]. - The company has faced labor shortages and higher employee turnover but managed to maintain adequate workforce availability and supply of raw materials[54]. - The company is expanding recruiting, training, and development programs to attract and retain a talented workforce[55]. - Labor market conditions remain tight, leading to potential challenges in attracting and retaining qualified personnel[93]. Debt and Financial Obligations - At December 31, 2024, the company had $2.5 billion of debt outstanding and a $323 million undrawn revolving credit facility[100]. - The company issued $400 million of 5.70% senior notes due 2033 in November 2023, with $4 million in debt issuance costs[163]. - The estimated pension benefit obligation totaled $1,119 million as of December 31, 2024, with sensitivity to changes in the discount rate assumption[206]. Market and Competitive Landscape - Major competitors in the containerboard market include International Paper, Smurfit WestRock, and Georgia-Pacific LLC, with competition primarily based on quality, service, and price[39]. - The primary end-use markets for corrugated products include food, beverages, and agricultural products (43%), and retail and wholesale trade (29%)[37]. - The economic outlook for 2025 remains uncertain, with persistent inflation affecting production and transportation costs[73]. - The company operates substantially all of its business in the United States, making it vulnerable to changes in domestic economic conditions[73]. Shareholder Returns and Dividends - The company declared dividends of $5.00 per common share for both 2024 and 2023, maintaining a consistent dividend policy[211]. - The company did not repurchase any shares in 2024, compared to repurchases of 0.3 million shares for $42 million in 2023[162].

Industry Overview - The Zacks Containers - Paper and Packaging industry is experiencing weak demand due to lower consumer spending amid inflation, but pricing actions by industry players are expected to mitigate the impacts of supply-chain disruptions and elevated costs [1][4] - The industry is projected to benefit from rising e-commerce activities and increasing demand for sustainable packaging options driven by environmental concerns [1][5] Key Trends - E-commerce accounted for over 19% of global retail sales in 2023, with revenues expected to reach $4,324 billion by 2025, growing at a CAGR of 8% from 2025 to 2029 [5] - The industry has significant exposure (over 60%) to consumer-oriented markets, ensuring stable demand for packaging solutions across economic cycles [5][6] Challenges - The industry faces challenges from persistent low volumes and high costs, with volume declines attributed to reduced consumer spending and customer destocking [4] - Supply-chain disruptions and increased costs for materials, labor, and transportation have pressured margins, although signs of easing supply-chain issues are emerging [4] Company Insights - **Sonoco Products Company (SON)**: Benefiting from the acquisition of Ball Metalpack, implementing price actions to counter inflation, and focusing on core businesses. Expected to achieve annual EBITDA of $1 billion by 2026 [15][16] - **Packaging Corporation of America (PKG)**: Experienced year-over-year growth in earnings and revenues due to higher volumes and pricing. The company is well-positioned to benefit from strong e-commerce demand [19][20] - **Amcor plc (AMCR)**: Actively investing in growth areas and has entered a merger agreement with Berry Global Group, expected to yield $650 million in synergies by the third year post-merger [22][23] - **AptarGroup (ATR)**: Reported growth in both top and bottom lines, driven by demand in the pharma and beauty segments, and focuses on acquisitions to expand its technology and product offerings [25][26] Performance Metrics - The Containers - Paper and Packaging industry has underperformed the S&P 500, gaining 9.6% compared to the S&P 500's 21.8% growth over the past year [10] - The industry is currently trading at a forward 12-month EV/EBITDA ratio of 17.97, higher than the S&P 500's 13.96 and the Industrial Products sector's 19.85 [12][14]

Group 1 - Packaging Corporation of America (NYSE: PKG) started FY24 with single-digit growth but achieved double-digit growth in the latter half of the year due to strong demand for its packaging products [1] - The company experienced a favorable demand environment, contributing to its overall performance [1] Group 2 - The analysis reflects a focus on companies with strong foundations and long-term potential, particularly in the technology, industrial, and conglomerate sectors [1] - The approach combines financial analysis with narrative to provide insights into market performance and company strategies [1]

Core Viewpoint - Packaging Corporation of America (PCA) reported its fourth quarter and full year 2024 earnings, highlighting a net income of $221 million or $2.45 per share, with adjusted net income of $222 million or $2.47 per share excluding special items [4]. Financial Performance - Fourth quarter 2024 net income was $221 million, translating to $2.45 per share [4]. - Adjusted net income for the same period was $222 million or $2.47 per share, excluding special items [4].

Core Viewpoint - Packaging Corporation of America (PKG) reported mixed financial results for Q4 2024, with adjusted EPS of $2.47, slightly missing the consensus estimate, but showing a year-over-year growth of 16% driven by higher prices and improved volumes [1][9]. Financial Performance - Adjusted EPS for Q4 2024 was $2.47, missing the Zacks Consensus Estimate of $2.51 by 2% but growing 16% year over year [1] - Including special items, earnings were $2.45 per share compared to $2.10 in the prior year [2] - Sales increased by 10.7% year over year to $2.15 billion, surpassing the consensus estimate of $2.13 billion [3] - Cost of products sold rose 9.7% year over year to $1.68 billion, while gross profit grew 14.5% to $469.7 million [3] - Adjusted operating income was $303.9 million, marking a 14.5% increase from $265.3 million in Q4 2023 [4] Segment Performance - In the Packaging segment, sales rose 11.2% year over year to $1.98 billion, exceeding estimates [5] - Total corrugated product shipments increased by 9.1% year over year, with containerboard production at 1,310,000 tons [5] - The Paper segment's revenues were $151.5 million, up 5% year over year, with adjusted operating profit at $35 million compared to $31 million in the prior year [7] Fiscal Year Overview - For the full year 2024, adjusted EPS was $9.04, slightly below the consensus estimate of $9.08, while sales reached $8.38 billion, reflecting a 7% year-over-year increase [9] - The company ended 2024 with a cash balance of $0.85 billion, down from $1.2 billion at the end of 2023 [11] Q1 2025 Outlook - For Q1 2025, PKG projects EPS of $2.21, indicating a 28.5% growth compared to Q1 2024 [12] - The company expects record levels of total shipments in the Packaging segment, although containerboard volume may be lower due to maintenance outages [12] - Price inflation is anticipated across most operating costs, with higher costs for wood, energy, and chemicals expected due to seasonal weather [14] Stock Performance - PKG shares have gained 41% over the past 12 months, outperforming the industry growth of 12.7% [16]

Core Viewpoint - Packaging Corporation of America (NYSE: PKG) has shown strong performance over the past year with a 40% increase in share price, but experienced a nearly 5% decline in after-hours trading following slightly disappointing Q4 results [1] Group 1 - The company’s shares have gained 40% over the past year [1] - There was a nearly 5% drop in share price after hours on Tuesday due to Q4 results [1] - The Q4 results raised questions regarding the company's future performance [1]

Packaging Corp. (PKG) came out with quarterly earnings of $2.47 per share, missing the Zacks Consensus Estimate of $2.51 per share. This compares to earnings of $2.13 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -1.59%. A quarter ago, it was expected that this maker of containerboard and corrugated packaging products would post earnings of $2.48 per share when it actually produced earnings of $2.65, delivering a surprise of ...

Financial Performance - Fourth quarter 2024 net income was $221 million, or $2.45 per share, compared to $189.2 million, or $2.10 per share in Q4 2023, representing a 5.5% increase in earnings per share[1]. - Full year 2024 net income was $805.1 million, compared to $765.2 million in 2023, reflecting a 5.0% increase[20]. - Net income for Q4 2024 was $221.1 million, an increase from $189.2 million in Q4 2023, representing a growth of 16.0%[23]. - The diluted EPS for Q4 2024 was $2.45, compared to $2.10 in Q4 2023, representing a 16.7% increase[20]. - Full year 2024 net sales reached $8.4 billion, up from $7.8 billion in 2023, indicating a year-over-year growth of approximately 7.7%[1]. Segment Performance - The Packaging segment's operating income for Q4 2024 was $297.2 million, an increase from $263.8 million in Q4 2023, while the Paper segment's operating income rose to $34.8 million from $28.1 million[6]. - The Paper segment reported an operating income of $34.8 million in Q4 2024, an increase from $28.1 million in Q4 2023, representing a growth of 23.9%[26]. - Packaging segment sales for the full year 2024 were $7,690.9 million, up 7.8% from $7,135.6 million in 2023[16]. - Segment operating income for the Packaging segment in Q4 2024 was $297.2 million, compared to $263.8 million in Q4 2023, marking an increase of 12.5%[26]. - Segment EBITDA for the Packaging segment in Q4 2024 was $424.6 million, up from $383.5 million in Q4 2023, a rise of 10.7%[26]. Operational Metrics - Total corrugated product shipments increased by 9.1% in Q4 2024 compared to the same quarter last year, with shipments per day also reaching record levels[6]. - Containerboard production for Q4 2024 was 1,310,000 tons, with inventory levels increasing by 54,000 tons compared to Q4 2023[6]. - For the three months ended December 31, 2024, total segment sales reached $2,146.1 million, an increase of 10.8% compared to $1,937.9 million in the same period of 2023[16]. Future Outlook - The company expects first quarter 2025 earnings of $2.21 per share, reflecting anticipated seasonal slowdowns and increased costs[7]. - The company plans to continue its market expansion and product conversion strategies, particularly in the linerboard segment[18]. Capital Expenditures and Charges - Capital spending for Q4 2024 was $201.3 million, up from $141.1 million in Q4 2023, indicating a focus on investment in operations[13]. - The company incurred $1.7 million in charges related to facility closures in Q4 2024, compared to $0.9 million in Q4 2023[18]. - The company announced a $9.7 million charge related to the discontinuation of uncoated freesheet paper production at the Jackson mill for the full year 2024[18]. - The total special items for the full year 2024 amounted to $12.4 million, impacting the net income positively by $9.4 million[20]. Profitability Metrics - The company reported a gross profit of $469.7 million in Q4 2024, compared to $410.1 million in Q4 2023, showing a significant improvement in profitability[13]. - EBITDA for Q4 2024 reached $438.2 million, compared to $392.3 million in Q4 2023, reflecting a year-over-year increase of 11.7%[23]. - EBITDA for the Packaging segment for the full year 2024 was $1,597.5 million, an increase of 2.7% from $1,555.7 million in 2023[18]. - EBITDA excluding special items for the full year 2024 was $1,637.1 million, up from $1,603.8 million in 2023, indicating a growth of 2.1%[23]. Interest and Depreciation - Interest expense for the full year 2024 was $41.4 million, down from $53.3 million in 2023, a decrease of 22.5%[23]. - Depreciation, amortization, and depletion for the full year 2024 totaled $525.6 million, compared to $517.7 million in 2023, an increase of 1.5%[23].

Core Viewpoint - Growth stocks are appealing due to their potential for above-average financial growth, but identifying stocks that can fulfill their growth potential is challenging due to associated risks and volatility [1] Group 1: Company Overview - Packaging Corp. (PKG) is currently recommended as a growth stock by the Zacks Growth Style Score system, which evaluates a company's genuine growth prospects beyond traditional metrics [2] Group 2: Earnings Growth - The historical EPS growth rate for Packaging Corp. is 8.4%, but projected EPS growth for this year is 24.6%, significantly surpassing the industry average of 5.2% [5] Group 3: Asset Utilization - Packaging Corp. has an asset utilization ratio (sales-to-total-assets ratio) of 0.93, indicating that the company generates $0.93 in sales for every dollar in assets, which is higher than the industry average of 0.83 [6] Group 4: Sales Growth - The company's sales are expected to grow by 7.6% this year, compared to the industry average of 0.4%, highlighting its strong sales growth potential [7] Group 5: Earnings Estimate Revisions - There has been a positive trend in earnings estimate revisions for Packaging Corp., with the Zacks Consensus Estimate for the current year increasing by 0.5% over the past month [8] Group 6: Investment Potential - Packaging Corp. holds a Zacks Rank of 2 (Buy) and a Growth Score of B, indicating it is a potential outperformer and a solid choice for growth investors [10]

Core Viewpoint - Packaging Corporation (PKG) is expected to report its fourth-quarter 2024 results on January 29, with revenue and earnings estimates indicating growth compared to the previous year [1][2]. Financial Estimates - The Zacks Consensus Estimate for PKG's fourth-quarter revenues is $2.01 billion, reflecting a 3.1% increase from the prior year [2]. - The consensus estimate for earnings is $2.51 per share, which represents a year-over-year growth of 17.8% and has increased by 0.4% over the past 60 days [2][3]. Earnings Surprise History - PKG has a history of beating Zacks Consensus Estimates, with an average surprise of 8.6% over the last four quarters [3]. Earnings Prediction Model - The current model does not predict an earnings beat for PKG, as it has an Earnings ESP of 0.00% and a Zacks Rank of 2 (Buy) [4][5]. Segment Performance Insights - The Packaging segment is expected to experience lower prices due to a decrease in benchmark index grades, with a negative price/mix impact of 4.3% anticipated for the quarter [6]. - Despite this, demand in the Packaging segment is projected to remain strong, with a year-over-year volume increase of 13.4% [7]. - The estimated quarterly revenues for the Packaging segment are $1.94 billion, indicating a 9.1% growth from the previous year, with an operating income estimate of $459 million, reflecting a 19.4% increase [8]. Paper Segment Performance - The Paper segment is expected to have flat prices and a volume increase of 3.2% year over year, with a negative pricing/mix impact of 1.9% for the fourth quarter [8]. - The estimated revenues for the Paper segment are $145.7 million, suggesting a 5.7% growth from the prior year, with an operating income estimate of $44 million, indicating a 26.1% rise [9]. Stock Performance - Over the past year, PKG shares have increased by 55%, significantly outperforming the industry average growth of 20.1% [10].