Core Insights - Packaging Corporation of America (PKG) reported adjusted earnings per share (EPS) of $2.48 for Q2 2025, surpassing the Zacks Consensus Estimate of $2.44 and the company's guidance of $2.41, reflecting a 13% year-over-year increase driven by higher prices and mix across segments [1][10]. Financial Performance - Total sales for Q2 2025 increased by 4.6% year-over-year to $2.17 billion, exceeding the Zacks Consensus Estimate of $2.16 billion [3][10]. - Cost of products sold rose by 3.1% year-over-year to $1.69 billion, while gross profit increased by 10.3% year-over-year to $483 million, resulting in a gross margin of 22.2%, up from 21.1% a year ago [3][10]. - Selling, general and administrative expenses were $153 million, slightly higher than the prior year's $149.5 million, with adjusted operating income rising by 12.8% year-over-year to $311 million [4]. Segment Performance - In the Packaging segment, sales grew by 5.1% year-over-year to $2.01 billion, surpassing estimates, although total corrugated product shipments remained flat [5]. - The Paper segment reported revenues of $146 million, down 2.9% year-over-year, but still beating estimates, with an operating profit of $25.8 million compared to $26.7 million in the prior year [6]. Cash Flow and Outlook - The company had a cash balance of $0.96 billion at the end of Q2, down from $1.17 billion at the end of the previous year [8]. - For Q3 2025, PKG projects an EPS of $2.80, expecting flat prices and mix in the Packaging segment, while production and sales in the Paper segment are anticipated to increase following the completion of the International Falls mill outage [9]. Stock Performance - PKG's shares have appreciated by 8.9% over the past year, contrasting with a 2.2% decline in the industry [11].
Packaging Corp Earnings Surpass Estimates in Q2, Sales Rise Y/Y