Core Insights - Greif, Inc. has entered into a definitive agreement with Packaging Corporation of America to divest its Containerboard business, which includes its CorrChoice sheet feeder network, aimed at debt reduction and unlocking value-creation opportunities [1][3][7] Group 1: Business Overview - Greif's containerboard business consists of two mills with a production capacity of 800,000 tons and includes eight sheet feeder and corrugated plants across the U.S. [2][7] - The containerboard business generated revenues of $1.2 billion and EBITDA of $212 million for the fiscal year ending April 30, 2025 [2][7] Group 2: Strategic Implications - The divestiture aligns with Greif's Build to Last strategy, enhancing portfolio optimization, capital efficiency, and growth acceleration [3][7] - The transaction is expected to close by the end of fiscal 2025, pending regulatory approvals, with Packaging Corp paying Greif $1.8 billion in cash [4][7] Group 3: Financial Performance - In Q2 of fiscal 2025, Greif reported adjusted earnings per share of $1.19, surpassing the Zacks Consensus Estimate of $1.08, reflecting a year-over-year improvement of 43.4% [5] - Revenues for the same quarter increased by 1.1% year over year to $1.39 billion, although it fell short of the Zacks Consensus Estimate of $1.43 billion [5] Group 4: Stock Performance - Greif's stock has appreciated by 26.4% over the past year, contrasting with a 3.2% decline in the industry [6]

Group 1 - Greif (GEF) has a Zacks Rank of 2 (Buy), indicating a positive earnings outlook, while Packaging Corp. (PKG) has a Zacks Rank of 4 (Sell) [3] - The Zacks Rank system favors stocks with strong earnings estimate revisions, which is a key factor for value investors [2][3] - GEF has a forward P/E ratio of 16.16, compared to PKG's forward P/E of 18.56, suggesting GEF may be undervalued [5] Group 2 - GEF's PEG ratio is 1.64, indicating a better valuation relative to its expected earnings growth compared to PKG's PEG ratio of 2.51 [5] - GEF has a P/B ratio of 1.39, significantly lower than PKG's P/B of 3.77, further supporting GEF's valuation advantage [6] - Based on various valuation metrics, GEF holds a Value grade of A, while PKG has a Value grade of C, indicating GEF is the superior value option [6]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 1-15399 (Exact Name of Registrant as Specified in its Charter) Delaware 36-4277050 (State or Other Jurisdiction of Incorporation or Organizatio ...

Group 1 - The article emphasizes the importance of strong foundational companies in the technology, industrial, and conglomerate sectors for long-term success [1] - It highlights the dual approach of analyzing financial data while narrating the stories and strategies of businesses to provide insights into market performance [1] - The focus on both quantitative analysis and qualitative storytelling reflects a commitment to understanding and explaining the financial landscape [1]

Packaging Corporation of America (NYSE:PKG) Q1 2025 Earnings Conference Call April 23, 2025 9:00 AM ET Company Participants Mark Kowlzan - Chairman and CEO Thomas Hassfurther - EVP, Corrugated Products Robert Mundy - EVP and CFO Conference Call Participants George Staphos - Bank of America Securities Mike Roxland - Truist Securities Gabe Hajde - Wells Fargo Mark Weintraub - Seaport Research Partners Anthony Pettinari - Citi Philip Ng - Jeffries Charlie Sands - BNP Paribas Operator Good morning, everyone. Th ...

Core Insights - Packaging Corporation of America (PKG) reported adjusted earnings per share (EPS) of $2.31 for Q1 2025, exceeding the Zacks Consensus Estimate of $2.21 and reflecting a 34% year-over-year increase [1] - The company's sales rose 8.2% year over year to $2.141 billion, surpassing the Zacks Consensus Estimate of $2.140 billion [2] - The gross profit increased by 22.8% year over year to $455 million, with a gross margin of 21.2%, up from 18.7% in the prior year [2] Financial Performance - The cost of products sold increased by 4.8% year over year to $1.69 billion [2] - Selling, general and administrative expenses were $161 million, compared to $152 million in the prior year [3] - Adjusted operating income grew 38.7% year over year to $286 million [3] Segment Performance - In the Packaging segment, sales increased by 9.6% year over year to $1.97 billion, with total corrugated product shipments per day rising 2.5% [4] - The Paper segment's sales were $154 million, down 5.9% year over year, with a sales volume decline of 7% [6] - Adjusted operating profit for the Paper segment was $35.6 million, slightly down from $36.1 million in the prior year [6] Cash Flow and Outlook - The cash balance at the end of Q1 was $0.91 billion, down from $1.25 billion at the end of the prior year [7] - For Q2 2025, the company projects an EPS of $2.41, expecting improvements in domestic prices and box shipments, although operating costs may rise due to lower containerboard volume [8][9] Stock Performance - Over the past year, PKG shares have gained 9.8%, outperforming the industry growth of 0.8% [10]

Core Insights - Packaging Corporation of America (NYSE: PKG) experienced a strong performance in 2024 but has seen a steady decline in its share price throughout 2025 due to disappointing Q4 results and a broader market sell-off [1] Financial Performance - The company reported disappointing Q4 results, contributing to the decline in share price [1] Market Reaction - Following the Q4 results, shares of Packaging Corporation of America have only increased marginally, indicating a lack of investor confidence [1]

Core Insights - Packaging Corp. reported revenue of $2.14 billion for the quarter ended March 2025, reflecting an 8.2% increase year-over-year and matching the Zacks Consensus Estimate, with an EPS of $2.31 compared to $1.72 in the previous year [1] - The company achieved an EPS surprise of +4.52%, with the consensus EPS estimate being $2.21 [1] Financial Performance - Segment Sales for Packaging reached $1.97 billion, aligning with analyst estimates and showing a 9.6% increase from the year-ago quarter [4] - Segment Sales for Corporate and Other were reported at $16.50 million, below the estimated $19.04 million, representing a 5.2% decline year-over-year [4] - Segment Sales for Paper amounted to $154.20 million, falling short of the $161.38 million estimate, indicating a 5.9% decrease compared to the previous year [4] - Segment operating income for Packaging was $284 million, exceeding the estimated $275.21 million [4] - Segment operating loss for Corporate and Other was reported at -$33.40 million, slightly worse than the estimated -$33.32 million [4] - Segment operating income for Paper was $35.60 million, slightly above the estimated $35.20 million [4] Stock Performance - Over the past month, Packaging Corp. shares have returned -9.3%, compared to a -8.9% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Core Insights - Packaging Corp. reported quarterly earnings of $2.31 per share, exceeding the Zacks Consensus Estimate of $2.21 per share, and showing an increase from $1.72 per share a year ago [1] - The company achieved revenues of $2.14 billion for the quarter, surpassing the Zacks Consensus Estimate by 0.03% and up from $1.98 billion year-over-year [3] Earnings Performance - The earnings surprise for the quarter was 4.52%, with the company having surpassed consensus EPS estimates three times over the last four quarters [2] - In the previous quarter, the company reported earnings of $2.47 per share against an expectation of $2.51, resulting in a surprise of -1.59% [2] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $2.71 on revenues of $2.24 billion, and for the current fiscal year, it is $10.52 on revenues of $8.92 billion [8] - The estimate revisions trend for Packaging Corp. is mixed, leading to a Zacks Rank 3 (Hold), indicating expected performance in line with the market [7] Industry Context - The Containers - Paper and Packaging industry is currently ranked in the bottom 19% of over 250 Zacks industries, suggesting potential challenges for stocks in this sector [9] - Another company in the same industry, Sonoco, is expected to report quarterly earnings of $1.41 per share, reflecting a year-over-year increase of 25.9% [10]

Financial Performance - Packaging Corporation of America reported first quarter 2025 net income of $204 million, or $2.26 per share, compared to $146.9 million, or $1.63 per share in the same period of 2024, representing a 38.8% increase in net income[1][16] - First quarter net sales increased to $2.1 billion in 2025 from $2.0 billion in 2024, marking a growth of 6.1%[1][16] - Diluted earnings per share excluding special items rose to $2.31, up from $1.72 in the first quarter of 2024, reflecting a 34.4% increase[1][3] - Total segment sales for Q1 2025 reached $2,141.0 million, a 8.2% increase from $1,979.5 million in Q1 2024[20] - Net income for Q1 2025 was reported at $203.8 million, a 38.7% increase from $146.9 million in Q1 2024[29] - Diluted EPS for Q1 2025 was $2.26, up from $1.63 in Q1 2024, representing a 38.6% increase[29] Segment Performance - Segment operating income for the Packaging segment was $278.1 million in Q1 2025, up from $203.8 million in Q1 2024, a growth of 36.4%[1][9] - Packaging segment operating income increased to $278.1 million, up 36.4% from $203.8 million year-over-year[20] - The Paper segment's sales volume decreased by 7% compared to the first quarter of 2024, although it showed a 2% increase compared to the fourth quarter of 2024[1][10] - Corporate and Other segment reported an operating loss of $(33.4) million, an improvement from $(37.5) million in Q1 2024[23] Cash and Capital Expenditure - The company ended the first quarter with cash, cash equivalents, and marketable debt securities totaling $914.4 million, down from $1,253.2 million in the previous year[1][16] - Capital spending for the first quarter of 2025 was $148.1 million, significantly higher than $76.7 million in the same quarter of 2024[1][16] Operational Efficiency - PCA's operational efficiency and cost reduction initiatives helped mitigate inflation impacts across its cost structure[1][11] - The company continues to focus on operational efficiency and cost management to enhance profitability in future quarters[20] Earnings Outlook - The company anticipates second quarter earnings of $2.41 per share, influenced by expected improvements in domestic prices and adjustments in maintenance outage schedules[1][11] Other Financial Metrics - Total corrugated products shipments increased by 2.5% compared to the first quarter of 2024, with containerboard production reaching 1,250,000 tons[1][10] - EBITDA excluding special items for Q1 2025 was $421.1 million, compared to $333.2 million in Q1 2024, reflecting a 26.4% growth[28] - Packaging segment EBITDA excluding special items was $409.3 million, compared to $326.2 million in the prior year, marking a 25.5% increase[32] - Interest expense for Q1 2025 was $12.9 million, compared to $9.6 million in Q1 2024, indicating an increase in financing costs[20] - The company incurred special items totaling $5.9 million in Q1 2025, impacting net income positively by $4.4 million[26]