Packaging Corp Of America

Strong Fourth Quarter Performance: Packaging Corporation of America (PCA) reported a fourth quarter net income of $221 million ($2.45 per share), a YoY increase from $192 million ($2.13 per share) in the fourth quarter of 2023. This growth was attributed to higher prices and mix (+$0.52), as well as volume growth (+$0.40) in the Packaging segment. Total company EBITDA (excluding special items) also increased to $439 million from $394 million, with record net sales of $1 billion.

Full Year Results and Future Guidance: For the full year 2024, PCA achieved earnings of $814 million ($9.04 per share), compared to $784 million ($8.70 per share) in 2023, with net sales growing from $7.8 billion to $8.4 billion. For the first quarter of 2025, PCA expects earnings around $2.21 per share, reflecting the seasonal slowdown common in Q1, along with higher operating costs due to inflation and planned maintenance outages.

Challenges from Inflation and Costs: Inflation remains a significant challenge across PCA's cost structure, particularly with higher operating costs (+$0.48 impact in Q4 2024), scheduled maintenance expenses (+$0.08), and increased depreciation costs (+$0.06). These factors suggest a potential squeeze on margins going forward despite strong demand.