Packaging Corporation of America (PCA) reported 2Q 2022 net income of $301 million, or $3.20 per share, and net income of $304 million, or $3.23 per share, excluding special items. 2Q net sales were $2.2 billion in 2022 and $1.9 billion in 2021.
Excluding special items, the $1.06 per share increase in 2Q 2022 earnings compared to the 2Q 2021 was driven primarily by higher prices and mix $2.04 and volume $.12 in the Packaging segment, higher prices and mix in the Paper segment $.18, lower scheduled outage expenses $.08, lower interest expense $.03, a lower share count resulting from 2021 share repurchases $.03, and other items $.03. These items were partially offset by higher operating costs ($.95), higher freight and logistics expenses ($.25), higher converting costs ($.10), higher depreciation expense ($.08), lower volume in the Paper segment ($.06), and a higher tax rate ($.01).
Results were $.40 above 2Q guidance of $2.83 per share primarily due to higher prices and mix in the Packaging segment, lower scheduled outage expenses, and lower fiber and energy costs resulting from efficiency and usage initiatives.
Commenting on reported results, Mark W. Kowlzan, Chairman and CEO, said, “Results for the quarter were excellent as we once again improved our margins while continuing to experience significant cost inflation across the Company as well as various supply chain challenges. We had great execution of our previously announced price increases in both the Packaging and Paper segments. Demand in our Packaging segment was solid with corrugated demand flat with last year’s record 2Q, which was up almost 10% versus the prior year, along with demand out of our containerboard mills generating new second quarter production and sales volume records. Even with record production from our mills, we still ended the quarter with weeks of containerboard inventory supply below our historical levels due to both internal and external demand needs. The scheduled outages in our containerboard mills were performed very well, but we had to postpone the scheduled outage at our International Falls paper mill due to excessive flooding in the area just prior to the outage. We have rescheduled this work to be completed in the third quarter. Employees across the Company continued to do an outstanding job of meeting our customers’ needs and delivering on the numerous initiatives and projects to reduce costs and improve efficiencies across all of our facilities.”
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 90 corrugated products plants and related facilities.
