Market Overview - U.S. stock futures rose on Wednesday following a mixed close on Tuesday, with major benchmark indices showing higher futures [1] - The CME Group's FedWatch tool indicates a 97.2% likelihood of the Federal Reserve keeping interest rates unchanged in January [2] - The 10-year Treasury bond yielded 4.24%, while the two-year bond was at 3.57% [2] Index Performance - Dow Jones increased by 0.04%, S&P 500 by 0.30%, Nasdaq 100 by 0.74%, and Russell 2000 by 0.40% in premarket trading [2] - The SPDR S&P 500 ETF Trust (NYSE:SPY) was up 0.33% at $697.77, and Invesco QQQ Trust ETF (NASDAQ:QQQ) advanced 0.77% to $635.96 [2] Stocks in Focus - Starbucks Corp. (NASDAQ:SBUX) was down 0.76% in premarket, projected to post quarterly earnings of $0.59 per share on revenue of $9.73 billion [4] - Microsoft Corp. (NASDAQ:MSFT) rose 0.087% ahead of earnings expected to be $3.97 per share on revenue of $80.27 billion [4] - Tesla Inc. (NASDAQ:TSLA) advanced 0.23%, projected to post quarterly earnings of $0.45 per share on revenue of $24.78 billion [4] - Seagate Technology Holdings PLC (NASDAQ:STX) jumped 10.02% after reporting better-than-expected revenue and earnings, along with strong guidance [4] Economic Insights - Jeffrey Roach, Chief Economist at LPL Financial, forecasts a resilient U.S. economy in 2026, with real economic growth projected at 2.5% year-over-year and nominal growth surpassing 5% [8] - Roach emphasizes that productivity growth, particularly from early AI adoption, will support economic expansion without reigniting inflation [8] - His team maintains a "tactical neutral stance on equities," favoring large-cap growth stocks and the communication services sector [9] Upcoming Economic Data - The FOMC will announce its interest-rate decision at 2:00 p.m., followed by a press conference from Fed Chair Powell at 2:30 p.m. ET [10] Commodities and Global Markets - Crude oil futures were down 0.22% to around $62.25 per barrel, while Gold Spot rose 1.75% to approximately $5,272.90 per ounce [11] - Bitcoin (CRYPTO: BTC) was trading 1.52% higher at $89,223.76 per coin [13]

Group 1 - U.S. stock futures are trading higher, indicating a positive market sentiment for the day [1] - Microsoft Corp. is expected to report quarterly earnings of $3.97 per share on revenue of $80.27 billion, with shares rising 0.4% to $482.50 in after-hours trading [1] - Packaging Corp Of America reported weaker-than-expected fourth-quarter results, projecting first-quarter GAAP EPS of $2.20, below market estimates of $2.26, leading to a 2.1% decline in shares to $218.99 [1] - Tesla Inc. is anticipated to post quarterly earnings of 45 cents per share on revenue of $24.78 billion, with shares increasing 0.4% to $432.49 in after-hours trading [1] - Starbucks Corp. is projected to report quarterly earnings of 59 cents per share on revenue of $9.73 billion, with shares slipping 0.1% to $95.70 in after-hours trading [1] - AT&T Inc. is expected to report quarterly earnings of 46 cents per share on revenue of $32.87 billion, with shares rising 0.3% to $23.07 in after-hours trading [1]

Core Insights - Packaging Corp. reported $2.36 billion in revenue for Q4 2025, a year-over-year increase of 10.1%, but fell short of the Zacks Consensus Estimate of $2.42 billion by 2.42% [1] - The company's EPS for the quarter was $2.32, down from $2.47 a year ago, resulting in an EPS surprise of -3.73% compared to the consensus estimate of $2.41 [1] Financial Performance - Segment Sales for Packaging reached $2.19 billion, matching analyst estimates and reflecting a 10.8% increase year-over-year [4] - Segment Sales for Corporate and Other amounted to $19.8 million, exceeding the estimated $18.01 million, with a year-over-year growth of 4.2% [4] - Segment Sales for Paper were reported at $154.3 million, surpassing the average estimate of $149.99 million, showing a year-over-year increase of 1.9% [4] Operating Income - Segment operating income for Packaging was $309.2 million, below the average estimate of $356.5 million [4] - Segment operating loss for Corporate and Other was reported at -$31.7 million, better than the estimated -$40.37 million [4] - Segment operating income for Paper was $32.7 million, which was lower than the average estimate of $35.89 million [4] Stock Performance - Over the past month, shares of Packaging Corp. have returned +6.3%, outperforming the Zacks S&P 500 composite's +0.4% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Core Insights - Packaging Corp. reported quarterly earnings of $2.32 per share, missing the Zacks Consensus Estimate of $2.41 per share, and down from $2.47 per share a year ago [1] - The company posted revenues of $2.36 billion for the quarter, missing the Zacks Consensus Estimate by 2.42%, but up from $2.15 billion year-over-year [3] Earnings Performance - The earnings surprise for the quarter was -3.73%, following a previous quarter where the earnings surprise was -3.53% [2] - Over the last four quarters, Packaging Corp. has surpassed consensus EPS estimates two times [2] Stock Performance - Packaging Corp. shares have increased approximately 7.6% since the beginning of the year, outperforming the S&P 500's gain of 1.5% [4] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $2.42 on revenues of $2.41 billion, and for the current fiscal year, it is $11.43 on revenues of $10.11 billion [8] - The estimate revisions trend for Packaging Corp. was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [7] Industry Context - The Containers - Paper and Packaging industry is currently ranked in the bottom 24% of over 250 Zacks industries, suggesting potential challenges for stocks within this sector [9] - Another company in the same industry, Avery Dennison, is expected to report quarterly earnings of $2.40 per share, reflecting a year-over-year change of +0.8% [10]

Financial Performance - Fourth quarter 2025 net income was $102 million, or $1.13 per share, with net income of $209 million, or $2.32 per share, excluding special items, compared to $2.45 per share in Q4 2024[1] - Full year 2025 net income reached $774 million, or $8.58 per share, while net income excluding special items was $888 million, or $9.84 per share, compared to $8.93 per share in 2024[1] - Net income for the full year 2025 was reported at $774.1 million, with diluted EPS of $8.58, down from $805.1 million and $8.93 in 2024[21] - For the three months ended December 31, 2025, net income was $101.8 million, with diluted EPS of $1.13, compared to $221.1 million and $2.45 in the same period of 2024[21] Sales and Revenue - Fourth quarter net sales were $2.4 billion in 2025, up from $2.1 billion in 2024, with full year net sales of $9.0 billion in 2025 compared to $8.4 billion in 2024[1] - Net sales for Q4 2025 reached $2,363.6 million, a 10.1% increase from $2,146.1 million in Q4 2024[13] - Packaging segment sales for Q4 2025 were $2,189.5 million, up 10.8% from $1,975.6 million in Q4 2024[15] Operating Income - Segment operating income for Packaging was $173.3 million in Q4 2025, down from $297.2 million in Q4 2024, while full year operating income was $1,125.3 million in 2025 compared to $1,101.5 million in 2024[6] - The Packaging segment reported operating income of $173.3 million for the three months ended December 31, 2025, down from $297.2 million in 2024[27] - The Paper segment's operating income was $32.7 million for the three months ended December 31, 2025, compared to $34.8 million in the same period of 2024[27] Expenses and Charges - Interest expense for the full year 2025 was $79.1 million, compared to $41.4 million in 2024, indicating a significant increase[13] - The company incurred $128.0 million in charges related to the restructuring of the Wallula mill in 2025[18] - The company incurred $33.2 million in acquisition and integration-related costs for the full year 2025[24] - Depreciation, amortization, and depletion for the full year 2025 amounted to $652.8 million, compared to $525.6 million in 2024[24] Future Outlook - For Q1 2026, the company expects earnings of $2.20 per share, with anticipated higher domestic containerboard and corrugated product prices[8] - The company forecasts slightly lower volume in the Paper segment for Q1 2026, with prices and mix expected to be slightly lower[8] Shareholder Actions - The company repurchased 760,000 shares during the quarter at an average price of $201 per share[7] Production and Inventory - Containerboard production was 1,407,000 tons in Q4 2025, with inventory up 84,000 tons from Q4 2024, primarily due to the acquisition of Greif[6] - PCA operates ten mills and 91 corrugated products plants, making it the third largest producer of containerboard products in North America[9] Special Items - Special items for the three months ended December 31, 2025, totaled $141.7 million, impacting net income by $107.1 million[21] - The Wallula mill restructuring contributed $128.0 million in special items for the three months ended December 31, 2025[21]

Core Viewpoint - Packaging Corporation of America (PCA) reported a decline in net income for the fourth quarter of 2025 compared to the previous year, primarily due to lower production and sales volumes, as well as increased operating costs. However, the company experienced growth in net sales year-over-year and expects improved demand moving forward [1][4][8]. Financial Performance - Fourth quarter 2025 net income was $102 million, or $1.13 per share, compared to $221 million, or $2.45 per share, in the fourth quarter of 2024. Excluding special items, net income was $209 million, or $2.32 per share, down from $293 million, or $2.47 per share, in the same quarter of 2024 [1][2][12]. - Full year 2025 net income was $774 million, or $8.58 per share, compared to $805 million, or $8.93 per share, in 2024. Excluding special items, full year net income was $888 million, or $9.84 per share, up from $814 million, or $9.04 per share, in 2024 [1][2][12]. Sales and Revenue - Fourth quarter net sales for 2025 were $2.4 billion, an increase from $2.1 billion in 2024. Full year net sales reached $9.0 billion in 2025, compared to $8.4 billion in 2024 [1][2][12]. - Segment sales for Packaging increased to $2.19 billion in Q4 2025 from $1.98 billion in Q4 2024, while Paper segment sales remained relatively stable [15][16]. Segment Performance - The Packaging segment reported an operating income of $173.3 million in Q4 2025, down from $297.2 million in Q4 2024. For the full year, operating income was $1.125 billion, slightly up from $1.101 billion in 2024 [6][16]. - The Paper segment's operating income was $32.7 million in Q4 2025, down from $34.8 million in Q4 2024, with full year performance remaining stable at $129.6 million [6][16]. Operational Insights - PCA's corrugated product shipments were down 1.7% year-over-year in Q4 2025, but shipments per day increased by 17.0% when including the acquired Greif business. Containerboard production was 1,407,000 tons, with inventory up by 84,000 tons compared to Q4 2024 [7][8]. - The company faced challenges in December 2025 with unfavorable volume and mix in the legacy corrugated business and production issues in the acquired Greif business [5][8]. Future Outlook - PCA anticipates higher per-day volume in its legacy corrugated products plants in Q1 2026, despite a seasonally slower period. The company expects to operate its containerboard mills at full capacity but will produce less containerboard than in Q4 2025 due to scheduled maintenance and fewer operating days [8][9]. - The company forecasts first quarter earnings of $2.20 per share, with expectations of price inflation across most operating costs, while also assessing potential impacts from recent winter storms [8][9].

Core Viewpoint - Packaging Corporation of America (PKG) is expected to report a revenue increase of 12.9% for Q4 2025, driven by the Greif containerboard deal and higher volumes in the Packaging segment, despite a slight decrease in earnings per share (EPS) [1][2][3] Revenue Growth - PKG's anticipated revenue for Q4 2025 is approximately $2.44 billion, reflecting a 12.9% increase from the previous year [2][6] - The Packaging segment is projected to see a 15.2% year-over-year rise in revenues, contributing significantly to overall growth [2][6] Earnings Per Share - Analysts expect PKG to report an EPS of $2.41 for Q4 2025, which represents a slight year-over-year decrease of 0.8% [3][6] - The consensus estimate for EPS has remained stable over the past 60 days, indicating consistency in analysts' projections [3] Previous Earnings Report - In the previous earnings report on October 22nd, PKG reported an EPS of $2.73, which was $0.10 below analysts' expectations [4] - The company achieved a return on equity of 19.72% and maintained a net margin of 10.18% during that quarter [4] Financial Metrics - PKG has a price-to-earnings (P/E) ratio of approximately 22.72 and a price-to-sales ratio of about 2.31 [5][6] - The debt-to-equity ratio stands at 0.92, indicating moderate debt levels relative to equity, while the current ratio is 3.16, reflecting strong liquidity [5][6]

Group 1 - Packaging Corporation of America (PKG) has increased its containerboard price to $70 per ton, effective March 1 [2] - Jefferies analyst Philip Ng anticipates that the rest of the industry will follow suit with similar price increases [2]

Core Viewpoint - Packaging Corporation of America (PKG) is expected to report fourth-quarter 2025 results on January 27, with revenue estimates indicating a 12.9% growth year-over-year, while earnings estimates suggest a slight decline of 0.8% compared to the previous year [1][5]. Revenue and Earnings Estimates - The Zacks Consensus Estimate for PKG's fourth-quarter revenues is $2.42 billion, reflecting a 12.9% increase from the prior year's figure [1][5]. - The consensus estimate for earnings is $2.45 per share, which has remained unchanged over the past 60 days, indicating a year-over-year decrease of 0.8% [1][2]. Segment Performance - The Packaging segment is projected to see a revenue increase of 15.2% year-over-year, supported by the acquisition of Greif's containerboard business [5][6]. - The Paper segment is expected to report revenues of $153 million, suggesting a 1.2% growth from the previous year, despite a slight volume decline of 0.8% [8]. Earnings Surprise History - PKG has beaten the Zacks Consensus Estimates in two of the last four quarters, with an average surprise of 0.3% [2][3]. - The model predicts that PKG is unlikely to achieve an earnings beat this quarter, as indicated by an Earnings ESP of -1.84% [4][6]. Recent Developments - The acquisition of Greif's containerboard business, which includes two mills and several plants across the U.S., is expected to positively impact PKG's earnings immediately [6][7]. - The Packaging segment's volume is anticipated to rise by 11.1% year-over-year, with favorable price and mix impacts contributing an additional 4.2% [7]. Stock Performance - Over the past year, PKG shares have decreased by 6.3%, compared to a 10.3% decline in the industry [11].

Company Performance - Shares of Packaging Corporation of America (PKG) have declined by approximately 6% over the past year [1] Industry Overview - The entire packaging sector is experiencing pressure due to weak demand and excess supply [1]