Packaging Corp Q2 Earnings Beat Estimates on Record Shipments

Packaging Corp’s Gross Profit Rises Y/Y in Q2

Sales increased 14.7% year over year to $2.49 billion and surpassed the consensus estimate of $2.40 billion by 3.6%. Total corrugated products shipments reached an all-time quarterly record, rising 24.3% both per day and in total from the prior-year quarter.

Gross profit increased 6.1% year over year to $512.5 million. However, the gross margin contracted to 20.6% from 22.2% as the cost of sales rose 17.1% to $1.98 billion. Selling, general and administrative expenses increased 17% to $179 million.

Adjusted operating income improved 1.4% year over year to $315 million. Adjusted EBITDA advanced 7.7% to $486 million, reflecting higher production and sales volumes in packaging and stronger paper segment results.

PKG’s Q2 Segmental Performances

Packaging: Sales in this segment increased 15.2% year over year to $2.31 billion, aided by higher production and sales volume, including contributions from the acquired Greif business. The figure beat our estimate of $2.14 billion. These gains were partly offset by unfavorable price and mix, along with higher labor, freight and operating costs.

Shipments per day at legacy corrugated products plants increased 4.1%. Containerboard production was 1,415,000 tons, while containerboard inventory increased 40,000 tons from the year-ago quarter due to the acquisition.

Adjusted operating profit was $328 million compared with $322 million in the prior-year quarter. Our model projected the segment’s adjusted operating income to be $313 million.  

Paper: The segment’s revenues were $157 million in the April-June quarter, up 7.9% year over year. Our model projected the segment’s adjusted operating income to be $154 million. Sales volume increased 6.3% from the second quarter of 2025. 

The segment reported an operating profit of $34.3 million compared with the year-ago quarter’s $25.8 million. The improvement was supported by higher sales volume and favorable price and mix. Our projection for the segment’s adjusted operating income was $32 million.

Packaging Corp's Cash Position Declines

PKG ended the quarter with $666.8 million in cash, cash equivalents and marketable debt securities, down from $955.9 million a year earlier. Capital spending increased to $205.9 million from $169.7 million.

For the first six months of 2026, capital expenditure totaled $370.6 million compared with $317.8 million in the prior-year period.

PKG Q3 Outlook

The company expects third-quarter 2026 adjusted earnings of $2.91 per share. The outlook assumes continued strong packaging demand, another sequential increase in corrugated products volume, and benefits from previously announced containerboard and corrugated product price increases.

PKG expects better operating performance across its containerboard mill system, although scheduled maintenance expenses will shift toward the paper segment. Freight costs and recycled fiber prices are expected to remain elevated, while higher mill production should increase chemical and electricity usage. PKG also anticipates lower paper volume but improved pricing and mix.

Packaging Corp Stock’s Price Performance

The company’s shares have gained 13.5% in the past year against the industry’s decline of 5.6%.

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PKG’s Zacks Rank

Packaging Corp currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Packaging Stocks Awaiting Results

Ball Corporation BALL is scheduled to release second-quarter 2026 results on Aug. 4. The Zacks Consensus Estimate for BALL’s second-quarter 2026 earnings is pegged at 99 cents per share, suggesting year-over-year growth of 10%.

The Zacks Consensus Estimate for Ball Corp’s top line is pegged at $3.67 billion, indicating growth of 9.8% from the prior-year reported figure. Ball Corp has a trailing four-quarter average surprise of 3.7%.

Silgan Holdings Inc. SLGN is scheduled to release second-quarter 2026 results on July 29. The Zacks Consensus Estimate for SLGN’s second-quarter 2026 earnings is pegged at 96 cents per share, implying a year-over-year dip of 4.9%.

The Zacks Consensus Estimate for Silgan Holdings’ top line is pegged at $1.62 billion, suggesting an increase of 5.1% from the prior-year reported figure. Silgan Holdings has a trailing four-quarter average surprise of 1.8%.

AptarGroup, Inc. ATR is scheduled to release second-quarter 2026 results on July 30. The Zacks Consensus Estimate for AptarGroup’s second-quarter 2026 earnings is pegged at $1.34 per share, indicating a year-over-year dip of 19.3%. 

The Zacks Consensus Estimate for the company’s top line is pegged at $1 billion, implying growth of 3.8% from the prior-year reported figure. ATR has a trailing four-quarter average surprise of 3.1%.

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