Packaging Corp Q3 adjusted EPS beats estimates on acquired Greif operations

Overview

• US containerboard and paper maker's Q3 sales rose yr/yr but slightly missed analyst expectations

• Adjusted EPS for Q3 beat analyst expectations, driven by favorable price and mix in Packaging

• Company expects Q4 earnings to decline due to higher maintenance outage and freight costs

Outlook

• Company expects Q4 earnings of $2.81 per share, excluding special items

• Packaging Corp anticipates solid corrugated products demand with some seasonal improvement in Q4

• Company expects higher freight, recycled fiber, wood fiber, chemicals and energy costs in Q4

Result Drivers

• GREIF ACQUISITION - Co said higher earnings from acquired Greif operations contributed to yr/yr earnings growth

• PRICE AND MIX - Favorable price and mix in Packaging segment drove higher earnings, per co

• COST PRESSURES - Higher labor, freight, fiber, and energy costs partially offset earnings gains

Company press release:

Key Details

*Applies to a deviation of less than 1%; not applicable for per-share numbers.

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 7 "strong buy" or "buy", 5 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the paper packaging peer group is "buy"

• Wall Street's median 12-month price target for Packaging Corp of America is $260.00, about 8.8% above its October 21 closing price of $239.00

• The stock recently traded at 18 times the next 12-month earnings vs. a P/E of 21 three months ago

Reuters Recommended Reads

• Oct 19 - Silgan and American Industrial to buy Trivium Packaging in $3.4 billion deal

• Oct 21 - Sonoco Products Q3 sales miss estimates on lower volume, weak food can demand

• Oct 20 - Copper tube maker Mueller Industries' Q3 revenue rises on higher volumes

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)