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]

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Financial Data and Key Metrics Changes - Third quarter net income for 2025 was $227 million or $2.51 per share, compared to $239 million or $2.65 per share in the third quarter of 2024. Excluding special items, net income was $247 million or $2.73 per share in 2025 [2][3] - Total company EBITDA for the third quarter, excluding special items, was $503 million in 2025, up from $461 million in 2024 [3] - Third quarter net sales increased to $2.3 billion in 2025 from $2.2 billion in 2024 [3] Business Line Data and Key Metrics Changes - In the packaging business, EBITDA, excluding special items, was $492 million with sales of $2.1 billion, resulting in a margin of 23.1%, compared to last year's EBITDA of $446 million and sales of $2 billion, or a 22.2% margin [6] - The paper segment reported EBITDA of $40 million with sales of $161 million, reflecting a margin of 24.9%, down from $43 million and a margin of 27.1% in the third quarter of 2024 [12][13] Market Data and Key Metrics Changes - Domestic containerboard and corrugated products prices and mix were $0.72 per share above the third quarter of 2024, while export containerboard prices were up $0.01 per share compared to last year [9] - Total shipments were down 1.1% in the third quarter of 2025 versus last year, with a noted decrease in shipments per day in corrugated products plants by 2.7% compared to the previous year [10] Company Strategy and Development Direction - The company aims to optimize production capabilities and reduce costs through ongoing investments and operational improvements, particularly following the acquisition of the GRIF containerboard business [7][8] - The integration of GRIF is expected to enhance long-term productivity and efficiency, with a focus on reducing inventory levels and improving customer service [11][34] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the operational improvements and synergies expected from the GRIF acquisition, projecting a run-rate EBITDA of approximately $240 million for the combined business [30] - The company anticipates challenges in the first quarter of 2026 due to tough comparisons but expects to see improvements in corrugated shipments and overall performance in the fourth quarter of 2025 [17][18] Other Important Information - Cash provided by operations reached a record $469 million, with free cash flow also at a record $277 million after capital expenditures of $192 million [14] - The company revised its capital expenditure forecast for the year to approximately $800 million, down from a previous estimate of $840 to $870 million [15] Q&A Session Summary Question: How are bookings and billings as the fourth quarter begins? - Management indicated bookings and billings are slightly over 1% up, but noted tough comparisons ahead [22][23] Question: Any insights on the GRIF acquisition and maintenance expectations? - Management highlighted that the acquired business is customer-focused and operationally compatible, with ongoing improvements expected [26][28] Question: Can you discuss the impact of outages on GRIF's performance? - The lower performance was attributed to outages and timing effects, with no economic downtime factored into GRIF's results [47] Question: What are the expectations for energy costs and inflation? - Management noted significant increases in energy costs and indicated plans to make several mills electricity independent [58][66] Question: How is the company managing inventory levels post-acquisition? - The company is actively working to reduce inventory levels and integrate operations to enhance efficiency [34][101]

Financial Data and Key Metrics Changes - Third quarter net income for 2025 was $227 million or $2.51 per share, compared to $239 million or $2.65 per share in the third quarter of 2024. Excluding special items, net income was $247 million or $2.73 per share in 2025 [2][3] - Total company EBITDA for the third quarter was $503 million in 2025, up from $461 million in 2024 [3] - Cash provided by operations reached a record $469 million, with free cash flow also at a record $277 million after $192 million in capital expenditures [14] Business Line Data and Key Metrics Changes - In the packaging business, EBITDA excluding special items was $492 million with sales of $2.1 billion, resulting in a margin of 23.1%, compared to last year's EBITDA of $446 million and sales of $2 billion with a margin of 22.2% [6] - The paper segment reported EBITDA of $40 million with sales of $161 million, reflecting a margin of 24.9%, down from a margin of 27.1% in the third quarter of 2024 [12][13] Market Data and Key Metrics Changes - Domestic containerboard and corrugated products prices and mix were $0.72 per share above the third quarter of 2024, but down $0.02 per share compared to the second quarter of 2025 [9] - Total shipments in the third quarter were down 1.1% compared to last year, with a noted decrease in shipments per day in corrugated products plants [10] Company Strategy and Development Direction - The company aims to optimize production capabilities and reduce costs, leveraging in-house technical expertise [7] - The acquisition of the Greif containerboard business is expected to enhance long-term productivity and efficiency, with plans to integrate operations into PCA's corrugated system [11][30] Management's Comments on Operating Environment and Future Outlook - Management noted that while some end markets, such as beef and building materials, are struggling, overall business performance remains strong in other segments [24][25] - For the fourth quarter, the company expects per-day corrugated shipments to be higher than the third quarter, despite having three fewer shipping days [17] Other Important Information - The company revised its capital expenditure forecast for the year to approximately $800 million, down from a previous estimate of $840 to $870 million [15] - The annual net interest expense is expected to increase by $95 million, with $8 million recorded in the third quarter [16] Q&A Session Summary Question: How are bookings and billings as the fourth quarter starts? - Bookings and billings are slightly over 1% up, but comparisons are tough [22][23] Question: Any insights on the Greif acquisition and maintenance? - The Greif business is customer-focused, and PCA personnel are actively involved in improving operations [26][28] Question: Can you discuss the EBITDA expectations for Greif? - Historical performance was around $240 million EBITDA, with synergies expected to reach about $60 million [30] Question: What is the inventory strategy post-Greif acquisition? - The company plans to manage inventory levels down over the next couple of quarters [34] Question: How are energy costs impacting the business? - Energy costs have risen significantly, and the company is investing in projects to become electricity independent [58][65] Question: What is the outlook for the box business tied to beef and building products? - These segments are significant, with beef facing long-term challenges due to low cattle herds [114]

Financial Data and Key Metrics Changes - Third quarter net income for 2025 was $227 million or $2.51 per share, compared to $239 million or $2.65 per share in the same quarter of 2024 [2][3] - Excluding special items, net income was $247 million or $2.73 per share in Q3 2025, up from $239 million or $2.65 per share in Q3 2024 [2][3] - Total company EBITDA for Q3 2025 was $503 million, compared to $461 million in Q3 2024 [3] - Third quarter net sales increased to $2.3 billion in 2025 from $2.2 billion in 2024 [3] Business Line Data and Key Metrics Changes - Packaging segment EBITDA, including the acquired GRIF business, was $492 million with sales of $2.1 billion, resulting in a margin of 23.1%, up from 22.2% in the previous year [5][10] - Paper segment EBITDA was $40 million with sales of $161 million, reflecting a margin of 24.9%, down from 27.1% in Q3 2024 [12] Market Data and Key Metrics Changes - Domestic containerboard and corrugated products prices and mix were $0.72 per share above Q3 2024, but down $0.02 per share compared to Q2 2025 [9] - Total shipments were down 1.1% in Q3 2025 versus last year, with a noted decline in specific end markets such as beef and building materials [10][88] Company Strategy and Development Direction - The company aims to optimize production capabilities and reduce costs, leveraging in-house technical expertise [6] - Integration of the GRIF acquisition is expected to enhance long-term productivity and efficiency [6][11] - The company plans to manage production to achieve lower inventories in the coming quarters [11][17] Management's Comments on Operating Environment and Future Outlook - Management noted that customer ordering patterns reflect ongoing market conditions, with some end markets facing challenges [23][88] - The company expects fourth-quarter earnings of $2.40 per share, excluding special items, with anticipated improvements from the acquired business [17] - Management expressed optimism about operational improvements and efficiency gains from the GRIF acquisition [27][85] Other Important Information - Cash provided by operations reached a record $469 million, with free cash flow also at a record $277 million [13] - The company revised its capital expenditure forecast for the year to approximately $800 million [14] - The annual net interest expense is expected to increase by $95 million due to the acquisition [15] Q&A Session Summary Question: Can you talk about bookings and billings as we're starting the fourth quarter? - Bookings and billings are slightly over 1% up, but tough comparisons are expected to continue [20][22] Question: Any large issues with GRIF relative to the deal model? - The acquired business is customer-focused, and operational improvements are being implemented [24][25] Question: Can you discuss the improvements at Massillon and Riverville? - Significant operational improvements have been observed, with a focus on efficiency and quality [37][40] Question: How is the company managing elevated input costs? - Energy costs have significantly increased, and the company is working on projects to achieve electricity independence [49][52] Question: What is the outlook for the containerboard market? - The company is adjusting to demand and has closed underperforming facilities to right-size operations [70][71] Question: How will the GRIF acquisition impact recycled demand? - The acquisition is expected to increase the use of recycled materials, with a focus on medium production [76][78]

Financial Data and Key Metrics Changes - The company reported third quarter net income of $227 million or $2.51 per share, with adjusted net income of $247 million or $2.73 per share, compared to $239 million or $2.65 per share in 2024 [3][4] - Third quarter net sales were $2.3 billion in 2025, up from $2.2 billion in 2024 [3] - Total company EBITDA for the third quarter, excluding special items, was $503 million in 2025 compared to $461 million in 2024 [3][4] Business Line Data and Key Metrics Changes - In the Packaging segment, EBITDA, excluding special items, was $492 million with sales of $2.1 billion, resulting in a margin of 23.1%, compared to last year's EBITDA of $446 million and sales of $2 billion with a margin of 22.2% [5][11] - The Paper segment reported EBITDA, excluding special items, of $40 million with sales of $161 million, reflecting a margin of 24.9%, down from a margin of 27.1% in 2024 [13] Market Data and Key Metrics Changes - Domestic containerboard and corrugated products prices and mix were $0.72 per share above 2024, while export containerboard prices were up $0.01 per share versus last year's third quarter [9][12] - Total shipments in the corrugated products plants were down 1.1% in 2025 compared to last year, with a noted decline in shipments per day [10] Company Strategy and Development Direction - The company completed the acquisition of the Greif Containerboard business, which is expected to improve long-term productivity and efficiency [4][7] - The management emphasized the integration of the acquired operations into PCA's corrugated system, highlighting the cultural compatibility and customer focus of the Greif team [11][30] Management Comments on Operating Environment and Future Outlook - Management noted that customer ordering patterns reflect ongoing market conditions, with some end markets, such as beef and building materials, facing challenges [26][112] - For the fourth quarter, the company expects per day corrugated shipments to be higher than the third quarter, with anticipated lower prices and mix in the Packaging segment [18][19] Other Important Information - Cash provided by operations reached a record $469 million, with free cash flow also at a record $277 million [14] - The company revised its capital expenditure forecast for the year to approximately $800 million, down from a previous forecast of $840 million to $870 million [15][16] Q&A Session Summary Question: Can you talk about bookings and billings as we're starting the fourth quarter? - The current blend of bookings and billings is slightly over 1% up, with tough comparisons expected to continue [24][25] Question: Any insights on the Greif acquisition and maintenance outlook? - The core converting side of the Greif business is well-capitalized, and operational improvements are being made [28][30] Question: How are you managing inventory and what are the expectations for 2026? - The company is actively working to reduce inventory levels and expects to manage this within normal operational outages [109] Question: Can you provide details on the impact of energy costs and inflation? - Energy costs have significantly increased, with electricity rates up 50% to 75%, impacting overall operational costs [55][57] Question: What is the outlook for the beef and building materials segments? - These segments are currently facing challenges, with beef herds at a 70-year low and building materials reliant on interest rates and housing starts [26][112]

Core Insights - Packaging Corp. reported revenue of $2.31 billion for the quarter ended September 2025, reflecting a 6% increase year-over-year and surpassing the Zacks Consensus Estimate of $2.26 billion by 2.17% [1] - The company's EPS for the quarter was $2.73, an increase from $2.65 in the same quarter last year, although it fell short of the consensus estimate of $2.83 by 3.53% [1] Financial Performance - Segment Sales for Packaging reached $2.13 billion, exceeding the average estimate of $2.1 billion by analysts, marking a 5.9% increase compared to the previous year [4] - Segment Sales for Corporate and Other amounted to $24.1 million, significantly higher than the estimated $17.26 million, representing a 67.4% increase year-over-year [4] - Segment Sales for Paper were reported at $161.2 million, slightly above the estimated $151.38 million, with a year-over-year increase of 1.2% [4] Operating Income - Segment operating income for Packaging was $347.9 million, slightly below the average estimate of $351.75 million [4] - Segment operating loss for Corporate and Other was reported at $-32.7 million, in line with the average estimate of $-32.77 million [4] - Segment operating income for Paper was $35.6 million, which was below the estimated $37.02 million [4] Stock Performance - Over the past month, Packaging Corp.'s shares have returned -2.6%, contrasting with the Zacks S&P 500 composite's increase of 1.1% [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance in the near term [3]

Core Insights - Packaging Corp. reported quarterly earnings of $2.73 per share, missing the Zacks Consensus Estimate of $2.83 per share, but showing an increase from $2.65 per share a year ago [1] - The company posted revenues of $2.31 billion for the quarter, exceeding the Zacks Consensus Estimate by 2.17% and up from $2.18 billion year-over-year [3] Earnings Performance - The earnings surprise for the quarter was -3.53%, while the previous quarter saw a positive surprise of +1.64% [2] - Over the last four quarters, Packaging Corp. has surpassed consensus EPS estimates two times [2] Revenue Performance - The company has topped consensus revenue estimates four times over the last four quarters [3] Stock Performance - Packaging Corp. shares have declined approximately 7.6% year-to-date, contrasting with the S&P 500's gain of 14.5% [4] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $2.67 on revenues of $2.48 billion, and for the current fiscal year, it is $10.33 on revenues of $9.07 billion [8] - The Zacks Rank for Packaging Corp. is 2 (Buy), indicating expectations for the stock to outperform the market in the near future [7] Industry Context - The Containers - Paper and Packaging industry is currently in the top 39% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [9]