Packaging Corporation of America
) reported net income from continuing operations (excluding
post-tax debt refinancing charges) of $48 million or 49 cents per
share in the second quarter of 2012 compared to a net income of $41
million or 42 cents per share in the first quarter of 2012, and a
net income of $40 million or 39 cents per share in the year-earlier
The record earnings were primarily attributable to increased
sales volume of containerboards and corrugated products during the
quarter. Additionally, the company also benefited from minimized
production costs. The company's earnings surpassed management's
expectations and also the Zacks Consensus Estimate of 45 cents per
share for the quarter.
GAAP EPS reported by the company was 46 cents per share compared
to 39 cents per share in the previous year quarter and 18 cents per
share in the last quarter.
Net sales came to $712 million, up 7% year over year and 6.1%
sequentially, comprehensively beating the Zacks Consensus Estimate
of $690 million.
Corrugated products' shipments surged 6.6% year over year.
Outside sales of containerboards declined from the year-earlier
quarter. The production of Containerboard jumped 5.3% year over
year to 638,000 tons. At the end of the current quarter the
company's containerboard inventories were approximately 1,000 tons
which was lower than the first quarter of 2012.
Gross profit in the quarter was $158.1 million, up 15.5% from
the year-ago quarter. Gross margin came in at 22.2% in the second
quarter of 2012 versus 20.6% in the year-ago quarter and 21.6% in
the previous quarter. Selling and administrative expenses amounted
to $52.9 million compared with $48.2 million in the previous year
Management stated that the high corrugated product shipments,
improved mill operations and reduced expenses boosted the company's
performance in the quarter. Moreover, the quarter saw a rise in the
export prices compared with the previous quarter.
The company anticipates that the sales accruing from corrugated
products would be enhanced in the coming quarter. In addition, the
production of the mill is likely to improve with reduced cost of
production. Including these factors, management expects that the
earnings per share for the third quarter of 2012 will be 54 cents.
The guidance excludes the charge accruing from note redemption.
Packaging Corporation currently has a Zacks Rank# 4 which
implies a short-term (1-3 months) 'Sell' rating on the stock.
PACKAGING CORP (PKG): Free Stock Analysis
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