Packaging Corporation of America (PCA) reported Q4 2023 net income of $189 million, or $2.10 per share, and net income of $192 million, or $2.13 per share, excluding special items. Q4 2023 net sales were $1.94 billion in 2023 and $1.98 billion in 2022.
Full year 2023 net income was $765 million, or $8.48 per share, and net income of $784 million, or $8.70 per share, excluding special items. Full year net sales were $7.8 billion in 2023 and $8.5 billion in 2022.
Excluding special items, the $(.22) per share decrease in Q4 2023 earnings compared to the Q4 2022 was driven primarily by lower prices and mix ($1.93) in the Packaging segment, lower prices and mix ($.04) and volume ($.03) in the Paper segment, and higher depreciation expense ($.10). These items were partially offset by higher volume in the Packaging segment $1.07, lower operating and converting costs $.51, lower scheduled maintenance outage expenses $.19, lower freight and logistics expenses $.03, lower other expenses $.04, and a lower share count resulting from share repurchases $.04.
Results were $.37 above Q4 2023 guidance of $1.76 per share primarily due to higher volume in the Packaging segment, lower operating and converting costs, and lower freight and logistics expenses.
Commenting on reported results, Mark W. Kowlzan, Chairman and CEO, said, “Throughout the quarter, demand in the Packaging segment was stronger than our expectations. In addition, the higher volume along with the operational benefits of our capital spending program and continued emphasis on cost management and process efficiencies across our manufacturing and converting facilities drove operating and converting costs lower as well. We had an excellent restart of our Wallula, WA mill and the No. 3 machine to meet the stronger demand and build some needed inventory during the quarter. We plan to restart the No. 2 machine at the Wallula mill in the Q1 to help manage our expectations in the first half of 2024 for continued strong demand together with scheduled mill maintenance outages and the final phase of the containerboard conversion of the No. 3 machine at our Jackson, AL mill. The Paper segment had very good results with volume slightly higher than expected and costs managed extremely well.”
PCA is the third largest producer of containerboard products and a leading producer of uncoated freesheet paper in North America. PCA operates eight mills and 86 corrugated products plants and related facilities.
