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Jun 30, 2022
PCA Q2 2022 Earnings Report
Reported net income of $301 million and net sales of $2.2 billion.
Key Takeaways
Packaging Corporation of America reported excellent second-quarter results with improved margins despite significant cost inflation and supply chain challenges. The company successfully implemented price increases in both the Packaging and Paper segments. Demand in the Packaging segment was solid, with corrugated demand flat compared to last year's record second quarter. The company expects third-quarter earnings of $2.80 per share.
Net income was $301 million, or $3.20 per share.
Net sales were $2.2 billion compared to $1.9 billion in the previous year.
Corrugated products shipments and shipments per day were flat compared to the second quarter of last year.
The company expects third quarter earnings of $2.80 per share.
PCA
PCA
PCA Revenue by Segment
Revenue by Segment
Packaging Revenue
CapyFin.comPaper Revenue
CapyFin.com Forward Guidance
The company expects third quarter earnings of $2.80 per share. They anticipate implementing the remaining portion of previously announced price increases in the Packaging segment and continuing to implement price increases in the Paper segment. The company expects softening corrugated products growth in the quarter but demand still firm as certain end markets work through their current supply of inventory. Continued inflation in most all of the operating and converting costs is expected to be the primary driver of third quarter results.
Positive Outlook
- Majority of previously announced price increases were recognized in the second quarter, the remaining portion will be implemented during the third quarter in Packaging segment.
- Will continue implementing previously announced price increases in our Paper segment.
- Began the third quarter with containerboard inventories below our target, so we plan to build inventory ahead of the fourth quarter outage at our Jackson Mill.
- Demand still firm as certain end markets work through their current supply of inventory.
- Expect continued inflation in most all of our operating and converting costs to be the primary driver of our third quarter results.
Challenges Ahead
- Economic conditions continuing to be negatively impacted by broad-based inflation and aggressive interest rate increases.
- Corrugated products growth as softening in the quarter.
- Higher gas, purchased electricity, and chemical prices along with higher labor costs are expected to be the key areas during the quarter.
- Continued rail service challenges along with rail fuel surcharges that typically lag diesel fuel prices by 30-60 days should also result in higher freight and logistics expenses.
- Scheduled outage costs will be higher due to the International Falls mill outage that was postponed from the second to the third quarter.
Revenue & Expenses
Visualization of income flow from segment revenue to net income