Latest news with #MarkW.Kowlzan
Yahoo
08-05-2025
- Business
- Yahoo
Q1 Earnings Highs And Lows: Packaging Corporation of America (NYSE:PKG) Vs The Rest Of The Industrial Packaging Stocks
As the craze of earnings season draws to a close, here's a look back at some of the most exciting (and some less so) results from Q1. Today, we are looking at industrial packaging stocks, starting with Packaging Corporation of America (NYSE:PKG). Industrial packaging companies have built competitive advantages from economies of scale that lead to advantaged purchasing and capital investments that are difficult and expensive to replicate. Recently, eco-friendly packaging and conservation are driving customers preferences and innovation. For example, plastic is not as desirable a material as it once was. Despite being integral to consumer goods ranging from beer to toothpaste to laundry detergent, these companies are still at the whim of the macro, especially consumer health and consumer willingness to spend. The 8 industrial packaging stocks we track reported a satisfactory Q1. As a group, revenues beat analysts' consensus estimates by 0.9%. While some industrial packaging stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 1.2% since the latest earnings results. Founded in 1959, Packaging Corporation of America (NYSE: PKG) produces containerboard and corrugated packaging products as well as displays and package protection. Packaging Corporation of America reported revenues of $2.14 billion, up 8.2% year on year. This print exceeded analysts' expectations by 1.5%. Overall, it was a strong quarter for the company with a solid beat of analysts' sales volume estimates and a decent beat of analysts' adjusted operating income estimates. Commenting on reported results, Mark W. Kowlzan, Chairman and CEO, said, 'A new first quarter revenue record was achieved to begin the new year. In the Packaging segment we had excellent implementation of our previously announced price increases and, although we began to see some pullback in the middle of the quarter related to the uncertainty created by global trade tensions, box demand was solid and exceeded a very strong comparative period in last year's first quarter. Outstanding operational performance and scheduled outage execution at our mills delivered record first quarter containerboard production to meet this demand, and we ended the quarter at targeted inventory levels. Our Paper segment continued to achieve impressive margins with both volume and prices slightly above original estimates. Across the Company, continued emphasis on operational efficiency, cost reduction initiatives, and capital project execution helped minimize the persistent inflation we see throughout most of our cost structure.' Unsurprisingly, the stock is down 3.4% since reporting and currently trades at $180. Is now the time to buy Packaging Corporation of America? Access our full analysis of the earnings results here, it's free. Formerly Crown Cork & Seal, Crown Holdings (NYSE:CCK) produces packaging products for consumer marketing companies, including food, beverage, household, and industrial products. Crown Holdings reported revenues of $2.89 billion, up 3.7% year on year, outperforming analysts' expectations by 1.5%. The business had a very strong quarter with an impressive beat of analysts' EPS estimates and a solid beat of analysts' EBITDA estimates. The market seems happy with the results as the stock is up 8.2% since reporting. It currently trades at $97.10. Is now the time to buy Crown Holdings? Access our full analysis of the earnings results here, it's free. Founded in 1991, Graphic Packaging (NYSE:GPK) is a provider of paper-based packaging solutions for a wide range of products. Graphic Packaging Holding reported revenues of $2.12 billion, down 6.2% year on year, in line with analysts' expectations. It was a softer quarter as it posted full-year revenue guidance missing analysts' expectations and full-year EBITDA guidance missing analysts' expectations significantly. Graphic Packaging Holding delivered the slowest revenue growth and weakest full-year guidance update in the group. As expected, the stock is down 13.6% since the results and currently trades at $21.85. Read our full analysis of Graphic Packaging Holding's results here. Established in 1898, International Paper (NYSE:IP) produces containerboard, pulp, paper, and materials used in packaging and printing applications. International Paper reported revenues of $5.90 billion, up 27.8% year on year. This result lagged analysts' expectations by 1.5%. It was a softer quarter as it also logged a miss of analysts' Cellulose Fibers revenue estimates and a significant miss of analysts' adjusted operating income estimates. International Paper scored the fastest revenue growth but had the weakest performance against analyst estimates among its peers. The stock is down 7.8% since reporting and currently trades at $43.88. Read our full, actionable report on International Paper here, it's free. Started with a $200 loan in 1880, Ball (NYSE:BLL) manufactures aluminum packaging for beverages, personal care, and household products as well as aerospace systems and other technologies. Ball reported revenues of $3.10 billion, up 7.8% year on year. This print beat analysts' expectations by 6.7%. It was a stunning quarter as it also put up a solid beat of analysts' organic revenue and adjusted operating income estimates. Ball achieved the biggest analyst estimates beat among its peers. The stock is down 2.3% since reporting and currently trades at $50.66. Read our full, actionable report on Ball here, it's free. As a result of the Fed's rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed's 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump's victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025. Want to invest in winners with rock-solid fundamentals? Check out our Strong Momentum Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate. Join Paid Stock Investor Research Help us make StockStory more helpful to investors like yourself. Join our paid user research session and receive a $50 Amazon gift card for your opinions. Sign up here.
Yahoo
23-04-2025
- Business
- Yahoo
Packaging Corporation of America (NYSE:PKG) Surprises With Q1 Sales But Stock Drops
Packaging Corporation of America (NYSE:PKG) reported revenue ahead of Wall Street's expectations in Q1 CY2025, with sales up 8.2% year on year to $2.14 billion. Its GAAP profit of $2.26 per share was 2% above analysts' consensus estimates. Is now the time to buy Packaging Corporation of America? Find out in our full research report. Revenue: $2.14 billion vs analyst estimates of $2.11 billion (8.2% year-on-year growth, 1.5% beat) EPS (GAAP): $2.26 vs analyst estimates of $2.22 (2% beat) Adjusted EBITDA: $421.1 million vs analyst estimates of $415.3 million (19.7% margin, 1.4% beat) EPS (GAAP) guidance for Q2 CY2025 is $2.41 at the midpoint, missing analyst estimates by 6.6% Operating Margin: 13.1%, up from 9.9% in the same quarter last year Sales Volumes rose 7.6% year on year, in line with the same quarter last year Market Capitalization: $16.26 billion Commenting on reported results, Mark W. Kowlzan, Chairman and CEO, said, 'A new first quarter revenue record was achieved to begin the new year. In the Packaging segment we had excellent implementation of our previously announced price increases and, although we began to see some pullback in the middle of the quarter related to the uncertainty created by global trade tensions, box demand was solid and exceeded a very strong comparative period in last year's first quarter. Outstanding operational performance and scheduled outage execution at our mills delivered record first quarter containerboard production to meet this demand, and we ended the quarter at targeted inventory levels. Our Paper segment continued to achieve impressive margins with both volume and prices slightly above original estimates. Across the Company, continued emphasis on operational efficiency, cost reduction initiatives, and capital project execution helped minimize the persistent inflation we see throughout most of our cost structure.' Founded in 1959, Packaging Corporation of America (NYSE: PKG) produces containerboard and corrugated packaging products as well as displays and package protection. Industrial packaging companies have built competitive advantages from economies of scale that lead to advantaged purchasing and capital investments that are difficult and expensive to replicate. Recently, eco-friendly packaging and conservation are driving customers preferences and innovation. For example, plastic is not as desirable a material as it once was. Despite being integral to consumer goods ranging from beer to toothpaste to laundry detergent, these companies are still at the whim of the macro, especially consumer health and consumer willingness to spend. A company's long-term sales performance is one signal of its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Over the last five years, Packaging Corporation of America grew its sales at a sluggish 4.3% compounded annual growth rate. This was below our standard for the industrials sector and is a rough starting point for our analysis. We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. Packaging Corporation of America's recent performance shows its demand has slowed as its annualized revenue growth of 1.4% over the last two years was below its five-year trend. Packaging Corporation of America also reports its number of units sold, which reached 1.25 million in the latest quarter. Over the last two years, Packaging Corporation of America's units sold averaged 8.5% year-on-year growth. Because this number is better than its revenue growth, we can see the company's average selling price decreased. This quarter, Packaging Corporation of America reported year-on-year revenue growth of 8.2%, and its $2.14 billion of revenue exceeded Wall Street's estimates by 1.5%. Looking ahead, sell-side analysts expect revenue to grow 4.5% over the next 12 months. While this projection suggests its newer products and services will spur better top-line performance, it is still below the sector average. Here at StockStory, we certainly understand the potential of thematic investing. Diverse winners from Microsoft (MSFT) to Alphabet (GOOG), Coca-Cola (KO) to Monster Beverage (MNST) could all have been identified as promising growth stories with a megatrend driving the growth. So, in that spirit, we've identified a relatively under-the-radar profitable growth stock benefiting from the rise of AI, available to you FREE via this link. Packaging Corporation of America has been an efficient company over the last five years. It was one of the more profitable businesses in the industrials sector, boasting an average operating margin of 14.3%. This result was particularly impressive because of its low gross margin, which is mostly a factor of what it sells and takes huge shifts to move meaningfully. Companies have more control over their operating margins, and it's a show of well-managed operations if they're high when gross margins are low. Looking at the trend in its profitability, Packaging Corporation of America's operating margin rose by 2.7 percentage points over the last five years, as its sales growth gave it operating leverage. Its expansion was impressive, especially when considering most Industrial Packaging peers saw their margins plummet. In Q1, Packaging Corporation of America generated an operating profit margin of 13.1%, up 3.2 percentage points year on year. The increase was encouraging, and because its operating margin rose more than its gross margin, we can infer it was more efficient with expenses such as marketing, R&D, and administrative overhead. Revenue trends explain a company's historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions. Packaging Corporation of America's EPS grew at an unimpressive 6.9% compounded annual growth rate over the last five years. On the bright side, this performance was better than its 4.3% annualized revenue growth and tells us the company became more profitable on a per-share basis as it expanded. Diving into the nuances of Packaging Corporation of America's earnings can give us a better understanding of its performance. As we mentioned earlier, Packaging Corporation of America's operating margin expanded by 2.7 percentage points over the last five years. On top of that, its share count shrank by 5%. These are positive signs for shareholders because improving profitability and share buybacks turbocharge EPS growth relative to revenue growth. Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business. For Packaging Corporation of America, its two-year annual EPS declines of 4.2% show it's continued to underperform. These results were bad no matter how you slice the data. In Q1, Packaging Corporation of America reported EPS at $2.26, up from $1.63 in the same quarter last year. This print beat analysts' estimates by 2%. We also like to analyze expected EPS growth based on Wall Street analysts' consensus projections, but there is insufficient data. We enjoyed seeing Packaging Corporation of America beat analysts' sales volume expectations this quarter. We were also happy its revenue, EPS, and EBITDA outperformed Wall Street's estimates. On the other hand, its EPS guidance for next quarter missed significantly. Overall, we think this was still a solid quarter with some key areas of upside. The guidance seems to be driving the move, and shares traded down 8.1% to $171.30 immediately following the results. Is Packaging Corporation of America an attractive investment opportunity right now? When making that decision, it's important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it's free. Sign in to access your portfolio
