Packaging Corporation of America (PKG): Q4 Revenue Beat, Earnings Miss

Key Highlights:

* Revenue: $2.15 billion (beat analyst estimates by 0.6%)
* EPS (GAAP): $2.45 (missed analyst expectations by 3.3%)
* Adjusted EBITDA: $439.3 million (missed analyst estimates by 1.5%)
* Q1 CY2025 EPS (GAAP) guidance: $2.21 (5.2% below analyst estimates)
* Operating Margin: 14.1% (in line with last year)
* Sales Volumes: 8% year-on-year growth
* Market Capitalization: $21.38 billion

Company Overview:

Packaging Corporation of America (NYSE: PKG) produces containerboard and corrugated packaging products, offering displays and protective solutions.

Industry Insight:

Industrial packaging companies benefit from economies of scale and capital investments, leading to advantages in purchasing and production. Eco-friendly packaging is a growing trend, driven by consumer preferences and innovation. However, the industry is affected by macroeconomic factors and consumer spending.

Sales Growth:

Over the past five years, PKG's sales have grown at a 3.8% annual rate, below industry standards. However, the company's year-over-year revenue growth of 10.7% in Q4 suggests improvement. Analysts expect 7.5% revenue growth over the next 12 months.

Operating Margin:

PKG has maintained an impressive average operating margin of 14.2% over the past five years, despite its low gross margin. The company's operating margin has improved by 2.3 percentage points in the same period.

Earnings Per Share:

PKG's EPS growth has been 4% annually over the past five years, aligning with its revenue performance. In Q4, EPS fell short of analyst estimates at $2.45. Analysts predict a 25.6% increase in EPS for the full year 2025.

Key Takeaways:

PKG exceeded analyst estimates for sales volume and revenue in Q4. However, its EPS guidance and actual EPS missed expectations. The stock's mixed performance suggests areas of strength and weakness. Analysts remain cautious about the stock's attractiveness at its current price. For a comprehensive analysis, consider reading our full research report.