With a market cap of $18.5 billion, Packaging Corporation of America (PKG) is a leading North American producer of containerboard and uncoated freesheet paper. The company operates through two segments: Packaging and Paper, offering products ranging from corrugated shipping containers and retail displays to commodity, specialty, and communication papers. Companies valued at more than $10 billion are generally considered “large-cap” stocks, and Packaging Corporation of America fits this criterion perfectl ...

Core Points - Packaging Corporation of America (PCA) announced a regular quarterly dividend of $1.25 per share on its common stock [1] - The dividend will be paid to shareholders of record as of December 15, 2025, with a payment date of January 14, 2026 [1] - PCA is the third largest producer of containerboard products and a leading producer of uncoated freesheet paper in North America [1] - The company operates ten paper mills and 92 corrugated products plants and related facilities [1]

Trading in Packaging Corporation of America (NYSE:PKG) is quiet Wednesday. This follows Tuesday's selloff of more than 5%.  The drop came after a report from a research firm indicated that the demand for boxes was expected to drop.The selloff may be over. The shares have reached a support level. Packaging Corporation is our Stock of the Day.Stocks trend lower when there are more shares for sale than there are to be bought. Sellers are forced to undercut each other to get the attention of buyers. This forces ...

Core Insights - The materials sector is experiencing a trend of oversold stocks, presenting potential buying opportunities for undervalued companies [1] Group 1: Oversold Stocks - TriMas Corp (NASDAQ:TRS) has an RSI of 29.9, with a stock price decline of approximately 17% over the past month, closing at $31.77 [7] - Packaging Corp of America (NYSE:PKG) has an RSI of 29.1, with an 8% stock price drop over the past month, closing at $191.68 [7] - Graphic Packaging Holding Co (NYSE:GPK) has an RSI of 28.5, with a 14% decline in stock price over the past month, closing at $15.17 [7] Group 2: Company Performance - TriMas Corp increased its share repurchase authorization to $150 million, indicating confidence despite recent stock price declines [7] - Packaging Corp of America reported downbeat quarterly earnings, with CEO Mark W. Kowlzan noting cautious ordering patterns and low export containerboard sales volume [7] - Graphic Packaging Holding reported strong third-quarter results but cut its FY25 adjusted EPS guidance below estimates, with CEO Michael Doss highlighting effective execution amid sluggish consumer volumes [7]

Core Insights - The materials sector is experiencing a trend of oversold stocks, presenting potential buying opportunities for undervalued companies [1] - The Relative Strength Index (RSI) is a key indicator used to identify oversold conditions, with a value below 30 indicating potential buying opportunities [1] Company Summaries - **TriMas Corp (NASDAQ:TRS)**: Recently increased share repurchase authorization to $150 million. The stock has fallen approximately 17% over the past month, with a 52-week low of $19.33. Current RSI value is 29.9, and shares closed at $31.77, down 1.1% [7] - **Packaging Corp of America (NYSE:PKG)**: Reported disappointing quarterly earnings, with a stock decline of around 8% in the past month and a 52-week low of $172.72. The current RSI value is 29.1, and shares closed at $191.68, down 1.4% [7] - **Graphic Packaging Holding Co (NYSE:GPK)**: Despite reporting strong third-quarter results, the stock has decreased about 14% over the past month, reaching a 52-week low of $14.90. The current RSI value is 28.5, and shares closed at $15.17, down 0.9% [7]

Financial Performance - Third quarter net sales increased by $131 million, or 6.0%, to $2.31 billion in 2025 compared to $2.18 billion in 2024[128] - Net income for the third quarter of 2025 was $227 million, or $2.51 per diluted share, down from $238 million, or $2.64 per diluted share in 2024[116] - Net sales increased by $389 million, or 6.2%, to $6,625.7 million for the nine months ended September 30, 2025, compared to $6,237.2 million in the same period in 2024[142] - For the nine months ended September 30, 2025, net income was $672.3 million, compared to $584.0 million for the same period in 2024, representing a 15.1% increase[177] - EBITDA for the nine months ended September 30, 2025, was $1,369.7 million, up from $1,188.7 million in 2024, reflecting a 15.2% growth[179] Segment Performance - Packaging segment operating income was $328 million in Q3 2025, compared to $321 million in Q3 2024, with EBITDA excluding special items rising to $492 million from $446 million[116] - Paper segment operating income decreased to $36 million in Q3 2025 from $39 million in Q3 2024, with EBITDA excluding special items falling to $40 million from $43 million[118] - Packaging segment operating income rose by $148 million to $952 million during the first nine months of 2025, driven by higher containerboard and corrugated products prices and mix[149] - Paper segment operating income increased by $2 million to $97 million compared to the same period in 2024, primarily due to higher prices and mix[150] - Segment operating income for the Packaging segment was $952.0 million for the nine months ended September 30, 2025, compared to $804.3 million in 2024, indicating an 18.4% increase[180] Cash Flow and Investments - Net cash provided by operating activities for the nine months ended September 30, 2025, was $1,111 million, an increase of $245 million from $866 million in the same period of 2024[159] - The Company used $2,287 million for investing activities during the nine months ended September 30, 2025, compared to $75 million in the same period of 2024, with $1,804 million allocated to the Greif Acquisition[163] - Net cash provided by financing activities was $1,126 million for the nine months ended September 30, 2025, compared to a net cash outflow of $763 million in the same period of 2024[166] - The net cash decrease in cash and cash equivalents for the nine months ended September 30, 2025, was $51 million, compared to an increase of $28.6 million in the same period of 2024[157] Debt and Financing - The Company entered into two credit agreements totaling $1.6 billion, including a $500 million three-year unsecured term loan and a $600 million revolving credit facility[155] - The net proceeds from financing activities related to the Greif Acquisition amounted to $1,494 million[167] - Approximately 75% of the company's debt has fixed interest rates, and a 1% increase in variable-rate debt would increase interest expense by approximately $10 million annually[182] Future Outlook - The company expects fourth quarter earnings to be lower than the third quarter of 2025 due to maintenance outages and seasonally lower volumes[126] - The Paper segment is projected to experience lower production and sales volumes in Q4 2025, with flat pricing compared to the seasonally stronger third quarter[124] - The company expects continued growth in earnings and liquidity, although actual results may differ due to various risks and uncertainties[190][191] Other Financial Metrics - Income from operations increased by $139 million, or 17.4%, during the nine months ended September 30, 2025, compared to the same period in 2024[148] - Gross profit increased by $129 million during the nine months ended September 30, 2025, driven by higher prices and mix in the Packaging and Paper segments[145] - Interest expense, net increased by $16 million during the nine months ended September 30, 2025, primarily due to financing for the Greif Acquisition[152] - The effective tax rate for the nine months ended September 30, 2025, was 24.7%, compared to 24.4% in the same period in 2024[153] - Other income (expense), net for the nine months ended September 30, 2025, totaled $(34.7) million, an improvement from $(51.0) million in 2024[147] Acquisition Details - The Greif Acquisition added approximately $12 million in depreciation and amortization and $8 million in interest expense in the first month of ownership[116] - The Company incurred $25 million in acquisition-related costs during the nine months ended September 30, 2025, related to the Greif Acquisition[176] - The company incurred acquisition and integration-related costs of $26.6 million for the nine months ended September 30, 2025, related to the Greif Acquisition[178] Environmental and Risk Management - The company has not reported any material changes in environmental matters since its 2024 Annual Report[184] - The company is exposed to commodity price changes and interest rate fluctuations, which it manages through certain physical commodity transactions[181] - The company has no off-balance-sheet arrangements as of September 30, 2025[183]

Core Insights - The sales of corrugated boxes in the U.S. continue to weaken, raising concerns about a disappointing holiday shopping season this year [1] - The third quarter saw the lowest shipment volume of corrugated boxes since 2015, continuing a trend of weakness from the second quarter [1][4] - Major companies in the packaging sector have warned that economic uncertainty is impacting retail and consumer spending [1] Industry Overview - Corrugated boxes are crucial packaging materials for food, daily necessities, and e-commerce shipping, often seen as a leading indicator of retail demand [4] - Typically, October sees a surge in box orders for retailers to stock up for the holiday season, but this year is notably sluggish [4] - A media survey indicated that most box factories reported October orders as "flat or below normal levels" [4] Consumer Confidence and Economic Indicators - The U.S. consumer confidence index has dropped to a five-month low, and manufacturing activity has contracted for eight consecutive months [4] - Thomas Hassfurther, President of Packaging Corporation of America, noted a lack of economic momentum and highlighted ongoing trade uncertainties affecting business [4] Company Performance - Smurfit Westrock reported an 8.7% year-over-year decline in box volume in North America for the third quarter, leading to a stock price drop of over 12%, marking the lowest closing price since its listing in July 2024 [4] - International Paper lowered its net sales forecast for this year and 2027, with a nearly 13% drop in stock price following the announcement [5] - CEO Andy Silvernail of International Paper projected a 1% to 1.5% decline in corrugated box shipments for 2024, attributing this to trade uncertainties, weak consumer confidence, and a sluggish real estate market [5] Market Outlook - Industry experts believe that the weak demand for corrugated boxes reflects a lack of manufacturing and retail restocking activity, suggesting that this year's holiday shopping season may fall short of previous years [5] - E-commerce, department stores, and durable goods sectors are facing heightened operational uncertainties [5]

Company Overview - Automatic Data Processing (ADP) provides payroll and HR services to over 1.1 million clients globally, including corporations, government entities, and small businesses [4] - The company has demonstrated strong client retention with a rate of 92.1%, close to its all-time high of 92.2% [1] Financial Performance - In the last quarter, ADP reported a 9.8% increase in earnings and a 7.5% rise in revenues [1] - Over the past decade, ADP has returned $30 billion to shareholders through dividends and share repurchases, while nearly tripling its dividend [2] - Revenue has nearly doubled from $10.9 billion to $20.6 billion over the last 10 fiscal years [3] Investment Appeal - ADP is recognized as a "Dividend King" with 50 consecutive years of dividend increases, indicating a strong commitment to returning value to shareholders [2] - The company’s business model is characterized as stable and essential, making it less susceptible to market volatility [10] - The current price-to-earnings ratio of ADP is competitive compared to the S&P 500 average, suggesting it may be an attractive investment opportunity [13]

Core Insights - The Packaging Corporation of America (PCA) reported a net income of $246.7 million, or $2.73 per share, for Q3 2025, surpassing the previous year's net income of $238.8 million, or $2.65 per share [1] - Net sales for the quarter increased to $2.31 billion from $2.18 billion a year earlier [2] Financial Performance - Earnings per share, excluding one-time items, were $2.73, while including one-time items, earnings were $2.51 per share, down from $2.64 in Q3 2024 [2] - Cost of products sold rose 8% year-on-year to $1.81 billion, while gross profit fell 0.2% to $504.3 million [4] - Adjusted operating income increased to $347.9 million from $321.6 million in the same quarter of the previous year [4] Segment Performance - The packaging segment saw sales grow 6% to $2.13 billion, with corrugated product shipments declining 1.1% year-on-year but increasing 5.3% when including the acquired business [4] - The paper segment generated revenues of $161.2 million, a 1.2% increase year-on-year, but adjusted operating profit decreased to $35.6 million from $38.5 million in Q3 2024 [5] Future Outlook - The company forecasts earnings per share of $2.40 for Q4 2025 [5] - PCA expects higher per-day corrugated shipments in Q4, despite having three fewer shipping days compared to Q3 [6] - Anticipated lower prices in the packaging segment due to a seasonally less rich mix, along with higher energy and fiber costs [7]

Core Insights - Packaging Corporation of America (PKG) reported adjusted earnings per share (EPS) of $2.73 for Q3 2025, missing the Zacks Consensus Estimate of $2.83 by 4% [1] - The company's revenues increased by 6% year over year to $2.3 billion, surpassing the Zacks Consensus Estimate of $2.26 billion [4] - The company anticipates a Q4 2025 EPS of $2.40, indicating a year-over-year decline of 2.8% and a sequential decline of 12% [11] Financial Performance - Adjusted EPS increased by 3% year over year, despite missing estimates [10] - Including one-time items, earnings were $2.51 per share, down from $2.64 in the prior year [3] - Gross profit decreased by 0.2% year over year to $504 million, with a gross margin of 21.8% compared to 23.1% a year ago [4] Segment Performance - In the Packaging segment, sales rose 6% year over year to $2.13 billion, with total corrugated product shipments down 1.1% year over year [6] - Containerboard production was 1,255,000 tons at legacy mills and 47,000 tons at acquired mills, with adjusted operating profit of $348 million [7] - The Paper segment's revenues were $161 million, up 1.2% year over year, but adjusted operating profit fell to $36 million from $39 million [8] Cost and Expenses - Cost of products sold increased by 8% year over year to $1.81 billion [4] - Selling, general and administrative expenses totaled $154 million, down from $162 million in the prior year [5] - Higher operating costs, lower production volumes, and increased depreciation and freight expenses impacted overall profitability [2] Cash Flow and Balance Sheet - The cash balance at the end of Q3 was $806.4 million, down from $841 million at the end of the prior year [9] Market Outlook - The company expects higher daily corrugated shipments in Q4 but anticipates seasonal cost and mix headwinds [12] - Containerboard production is expected to dip sequentially due to maintenance outages, impacting earnings by 29 cents [12] - The Packaging segment is projected to experience lower prices due to a less favorable seasonal mix [13] Stock Performance - PKG shares have declined by 8.3% over the past year, outperforming the industry decline of 34.0% [15]