Packaging Corp. (NYSE: PKG) reported Q1 EPS of $1.98, $0.02 better than the analyst estimate of $1.96. Revenue for the quarter came in at $1.73 billion versus the consensus estimate of $1.77 billion.

Commenting on reported results, Mark W. Kowlzan, Chairman and CEO, said, “In our Packaging segment, we had record first quarter volumes in both our containerboard mills and corrugated products plants as well as higher prices and mix, compared to the first and fourth quarters of 2018. We ran our containerboard system to demand, and our production allowed us to supply the necessary containerboard to achieve a first quarter record for box shipments per day. In our Paper segment, prices and mix continued to move higher due to the successful execution of our announced price increases, and sales volume improved as we moved out of the seasonally slower fourth quarter. Overall, we were able to exceed our expected results even though we had to overcome significant weather-related challenges across the Company that negatively impacted us during the quarter.”

“Looking ahead to the second quarter,” Mr. Kowlzan added, “in our Packaging segment we expect seasonally higher containerboard and corrugated products shipments, with lower prices as a result of the published domestic containerboard price decreases and lower export prices. In our Paper segment, volume should be similar to the first quarter and we will continue implementing the previously announced paper price increases, but scheduled outage costs will be higher due to the annual shutdown at our International Falls mill. Across both segments we anticipate slightly higher freight, repairs, and certain fixed costs as well as higher share-based compensation costs due to the accounting treatment of restricted stock. Energy costs should improve as we move into seasonally milder weather, recycled fiber prices should be slightly lower, and our effective tax rate should be lower. Considering these items, we expect second quarter earnings of $2.05 per share.”

GUIDANCE:

Packaging Corp. sees Q2 2019 EPS of $2.05, versus the consensus of $2.13.

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