Packaging Corporation Of America ((PKG)) has held its Q3 earnings call. Read on for the main highlights of the call.
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Packaging Corporation of America (PCA) recently held its earnings call, revealing a generally positive outlook for the quarter. The company reported increased net income, record cash flow, and a successful integration of the Greif acquisition. Despite these achievements, PCA acknowledged ongoing challenges in export sales volume, specific market segments, and rising operating costs.
Increased Net Income
The third quarter of 2025 saw PCA’s net income rise to $247 million, or $2.73 per share, compared to $239 million, or $2.65 per share, in the same period of 2024. This growth highlights the company’s ability to enhance profitability year-over-year.
Surge in EBITDA
PCA reported a significant increase in EBITDA, excluding special items, which reached $503 million in 2025, up from $461 million in 2024. This surge underscores the company’s strong financial performance and operational efficiency.
Record Cash Provided by Operations
The company achieved an all-time quarterly record in cash provided by operations, amounting to $469 million. Additionally, free cash flow reached a record $277 million, showcasing PCA’s robust cash generation capabilities.
Successful Acquisition of Greif Containerboard Business
PCA completed the acquisition of the Greif Containerboard business on September 2, 2025. This strategic move is expected to enhance long-term productivity and efficiency, contributing positively to the company’s future growth.
Strong Performance in Packaging Segment
The packaging segment demonstrated strong performance with improved EBITDA margins of 23.1%, up from 22.2% last year. The segment also benefited from favorable pricing and mix, contributing $0.72 per share over the third quarter of 2024.
Decline in Export Sales Volume
Despite overall positive results, PCA faced a decline in export sales volume of containerboard, which was down 8,000 tons from the second quarter of 2025 and 32,000 tons from the third quarter of 2024. This decline poses a challenge to the company’s international market presence.
Challenges in Beef and Building Materials Segments
PCA encountered difficulties in certain market segments, notably beef, where cattle herds are at a 70-year low, and building materials, affected by reduced housing starts. These challenges highlight areas of concern for the company.
Higher Operating Costs
The company faced higher operating costs amounting to $0.33 per share, which impacted overall profitability. Managing these costs remains a priority for PCA to maintain its financial health.
Forward-Looking Guidance
Looking ahead, PCA provided guidance indicating a net income of $227 million or $2.51 per share for the third quarter of 2025, rising to $247 million or $2.73 per share when excluding special items. The company’s net sales increased to $2.3 billion, with EBITDA improving to $503 million. Despite acquisition-related expenses, PCA’s earnings exceeded guidance by $0.04, driven by favorable pricing and mix in the Packaging segment and reduced freight costs.
In summary, PCA’s earnings call reflected a positive quarter with increased net income, record cash flow, and successful strategic acquisitions. While challenges persist in export sales and certain market segments, the company’s strong performance in the packaging segment and effective cost management provide a solid foundation for future growth.