PKG · Packaging Corporation of America

Packaging Corporation of America reported first quarter 2026 results with net sales of $2.4 billion, up from $2.1 billion in the prior year, driven by the acquired Greif operations and 1.2% higher corrugated products shipments in the legacy packaging business (2.8% higher shipments per day despite one fewer shipping day). GAAP net income fell to $170.9 million or $1.91 diluted EPS from $203.8 million or $2.26, primarily due to $59.6 million in special items including $53.3 million Wallula mill restructuring charges, $3.4 million acquisition/integration costs, and $2.9 million facility closure costs. Excluding these, adjusted diluted EPS rose to $2.40 from $2.31, beating internal guidance of $2.20 by $0.20. The $0.09 year-over-year adjusted EPS increase reflected $0.17 from favorable packaging prices/mix, $0.11 lower fiber costs, $0.09 lower maintenance expenses, and $0.08 lower packaging labor/operating costs, offset by $0.13 higher freight, $0.11 lower packaging volumes, and $0.06 loss from Greif due to winter storm impacts. Packaging segment operating income was $260.3 million reported ($316.5 million adjusted, up from $284.0 million), Paper $32.9 million (flat), and Corporate/Other $(41.9 million). Containerboard production hit 1,398,000 tons with inventories up year-over-year due to acquisition. CEO Mark W. Kowlzan highlighted record legacy shipments per day, strong demand/mix, mill efficiency mitigating input cost and weather pressures, Greif integration progress, and Paper segment volume beats with price increases implemented. For Q2, management guides $2.33 adjusted EPS, citing sustained packaging demand/seasonal volume gains, containerboard/corrugated price hikes, flat Paper volume with higher prices, offset by mill outages, elevated freight/fiber/chemical costs, muted wage benefits progression, and higher tax rate from Q1 share-based comp vesting.