What's In The Offing For Packaging Corp's (PKG) Q3 Earnings?
Zacks Investment Research | Oct 17, 2019 09:53PM ET
Packaging Corporation of America (NYSE:PKG) is set to release third-quarter 2019 results, after the closing bell on Oct 23.
Which Way are the Estimates Headed?
The Zacks Consensus Estimate for Packaging Corporation’s to-be-reported quarter’s earnings is currently pinned at $1.90, reflecting a year-over-year fall of 14.8%. The Zacks Consensus Estimate for total sales of $1,766 million suggests a 2.4% drop, year on year.
Let’s see how things are shaping up prior to this announcement.
Factors at Play
Packaging Corporation’s third-quarter 2019 performance will likely reflect benefits from seasonally-higher containerboard and corrugated products shipments as well as lower effective tax rate. These gains are likely to have been offset by lower prices and higher converting costs. Also, the company’s quarterly results are expected to have been adversely impacted by annual outage costs and higher freight and repair costs.
Packaging Corporation will benefit from the e-commerce boom that will lead to increase in demand in boxes, in the upcoming period. These days, customers find a lot of different channels to sell-through, including e-commerce. The company has a wide base of customers and expects the business to grow. This momentum is expected to have continued in the third quarter as well.
Coming to the segments, the Zacks Consensus Estimate for the Packaging segment’s net sales is pegged at $1,540 million for the quarter, calling for 0.3% expected year-over-year growth. The Zacks Consensus Estimate for adjusted operating income of the segment is pegged at $254 million, indicating year-over-year decline of 12.4%.
The Zacks Consensus Estimate for the Paper segment’s revenues is currently pinned at $244 million, suggesting a 4% fall from the prior-year quarter’s $254 million. The company’s discontinuation of the production of uncoated free sheet and coated one-side grades at the Wallula, WA mill helped optimize the entire containerboard system platform, and improved its manufacturing and freight costs. These opportunities have aided the company in boosting mill capacity. This move is anticipated to have been conducive to the segment’s margin for the July-September quarter.
Packaging Corporation of America Price and EPS Surprise
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