Packaging Corp. (PKG) Reports In-Line Q4 EPS; Issues Light Q1 EPS Outlook

Packaging Corp. (NYSE: PKG) reported Q4 EPS of $1.16, in-line with the analyst estimate of $1.16. Revenue for the quarter came in at $1.43 billion versus the consensus estimate of $1.48 billion.

Commenting on reported results for the quarter and full year, Mark W. Kowlzan, CEO, said “We had a solid quarter with strong corrugated products demand, productive mill operations, and a successful rebuild and start-up of the D3 machine. As a result of the D3 production, we were able to reduce the outside purchases of containerboard from about 17,000 tons per month to 4,500 tons in December. Excluding special items, our 2014 earnings of $4.66 per share were up 40% over 2013’s record earnings, and total company EBITDA was $1.144 billion, up $393 million, or 52% over 2013. This earnings improvement was driven primarily by the Boise acquisition, including synergies realized.”

“Looking ahead to the first quarter,” Mr. Kowlzan added, “we expect lost containerboard production of about 60,000 tons and higher operating costs from annual maintenance downtime at our two largest containerboard mills and two less production days compared to the fourth quarter. This will be essentially offset by lower amortization of annual outage repair costs. Corrugated products shipments are expected to be seasonally lower, and white paper prices are expected to be lower with a full quarter’s impact of published price changes. Seasonally colder weather will increase wood, energy and chemical costs. In addition, labor and benefit costs will be higher with timing related payments and annual wage increases. These items will be partially offset by higher production on the D3 paper machine and lower interest expense. We currently expect first quarter earnings of $1.07 to $1.10 per share.”

Packaging Corp. sees Q1 2015 EPS of $1.07-$1.10, versus the consensus of $1.26.

For earnings history and earnings-related data on Packaging Corp. (PKG) click here.

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