Packaging Corporation of America (PKG) Q1 2025 earnings summary

Executive summary

• Net sales reached a record $2.14 billion in Q1 2025, up from $1.98 billion in Q1 2024, with net income of $208 million ($2.31/share) excluding special items, compared to $155 million ($1.72/share) last year.

• EBITDA excluding special items was $421.1 million, up from $333.2 million in Q1 2024.

• Growth was driven by higher prices, improved mix and volume in Packaging, and record containerboard production.

• Results exceeded guidance by $0.10 per share.

Financial highlights

• Net sales increased 8.2% year-over-year to $2,141 million.

• Adjusted EPS increased by $0.59 year-over-year, mainly due to higher prices/mix and volume in Packaging.

• Gross profit improved to $454.7 million from $370.4 million year-over-year.

• Operating cash flow set a Q1 record at $339 million; free cash flow also a record at $191 million.

• Capital expenditures totaled $148 million in Q1 2025.

Outlook and guidance

• Q2 2025 earnings expected at $2.41/share, with continued price improvement in Packaging.

• Anticipates higher operating costs in Q2 due to planned maintenance outages and higher freight/depreciation.

• Guidance reflects potential negative impacts from global trade tensions and tariff actions.

• Expects box shipments to rise in Q2 and in the second half, with customers maintaining lean inventories.