Packaging Corp. of America
stock was rising after the producer of container products reported strong earnings on lower costs.
Packaging Corp.
(ticker: PKG) reported second-quarter earnings of $2.31 a share after the close of trading Monday. Analysts were expecting $1.93 a share.
The company said during its earnings call that the profit beat was mostly due to lower operating costs and lower freight and logistics expenses.
“Not only did PKG post a big 2Q EPS beat but its Packaging 2Q Ebitda margins was 22.6%—a remarkable showing given the current challenging environment, not to mention relative to the types of margins we expect its major competitors will be posting,” Seaport Research Partners analyst Mark Weintraub wrote in a note. He rates the stock a Buy with a $165 price target.
Packaging Corp. Chief Executive Mark Kowlzan said the company “continued to operate both our Packaging and Paper segments against a challenging demand environment.” It does, however, expects to see shipments per day improve from the second quarter and anticipates seasonally stronger volume in the paper segment from back-to-school shipments. Prices in the packaging and paper segments though are expected to be lower.
Shares of Packaging Corp. surged 11% to $153.63 and were on pace for their largest percentage increase since March 2020. The stock was the best performer in the
S&P 500
on Tuesday.
While earnings topped forecasts, revenue of $1.95 billion missed analysts’ estimates of $1.99 billion, according to FactSet.
Write to Angela Palumbo at [email protected]
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