Packaging Corporation Sees Fourth-Quarter Adjusted Earnings of $2.81 a Share
Key Facts
Packaging Corporation of America forecast adjusted earnings of $2.81 a share for the fourth quarter of 2026, according to its third-quarter earnings statement, as it anticipates lower production and seasonal cost pressures. The company specified that its forecast was "excluding special items," meaning on a non-GAAP adjusted earnings basis. The projected figure is below the adjusted earnings of $3.04 a share the company reported in the third quarter of the same year. Adjusted earnings in the corresponding quarter of 2025 were $2.73 a share, marking a year-on-year improvement ahead of a quarter in which the company expects a slowdown compared with its latest performance. Third-quarter net sales were about $2.6 billion, according to figures the company disclosed in its earnings statement. That compares with sales of about $2.3 billion in the third quarter of the previous year, alongside the year-on-year increase in adjusted earnings.
Total corrugated products shipments rose 10.6% in the third quarter of 2026 compared with the same period of 2025, according to the company. Shipments per shipping day recorded the same growth rate, with the increase spanning both total volume and the daily average. However, the packaging business in place before the acquisition recorded a 0.5% year-on-year decline in corrugated products shipments, both in total and per shipping day. Shipment trends in the pre-acquisition business thus diverged from those of the company as a whole following the addition of the acquired assets. On the performance of those assets, Investing quoted management as saying at the Jefferies Industrials Conference that the acquisition of the Greif business "continues to exceed expectations." Management added, according to the report, that production had increased, operating continuity had improved and synergies were ahead of target.
The transaction originated in an agreement to buy Greif's containerboard business announced in July 2025, according to Packaging Corporation's acquisition statement. The agreement set cash consideration of $1.8 billion for the business, expanding the company's operations in the production of containerboard. The containerboard mills included in the transaction had approximate production capacity of 800,000 tons, according to figures announced when the agreement was reached. Greif subsequently announced the completion of the sale of its containerboard business to Packaging Corporation, transferring ownership of the business to the buyer. When it announced the transaction, Packaging Corporation set a target of approximately $60 million in pretax synergies, which it expected to realize in full within two years of the acquisition's closing.
In its transaction announcement, Packaging Corporation identified a range of expected sources of synergies, spanning mill operations and product transportation, as part of its plan to capitalize on the acquired business. The plan included improving the mills' operating and production capabilities and increasing their efficiency, elements the company linked to the anticipated benefits of combining the operations. It also listed increased integration among the sources of those benefits, alongside targeted improvements in mill operations. The company identified optimizing the mix of paper grades produced as another avenue for achieving synergies, making the composition of output part of the announced improvement program. Expected sources of benefits also extended to lower transportation costs, alongside measures related to production and integration. These targets combine improvements in the performance of industrial assets with efforts to streamline product transportation costs, according to the company's details on the sources of synergies when it announced the acquisition.
For the fourth quarter of 2026, the company expects lower containerboard production, with maintenance outages scheduled at 3 mills, according to its earnings statement. It also expects seasonally higher energy usage during the same period among the factors putting pressure on costs. The outlook follows a third quarter in which management said results faced pressure from freight costs. It also listed recycled fiber among the sources of cost pressure during that quarter, alongside product transportation expenses. Chemicals were another pressure on results identified by the company ahead of the final quarter, with its maintenance outages and seasonally higher energy needs.