Packaging Corporation of America (PKG) Q1 2026 earnings summary

Executive summary

• Q1 2026 net income was $171 million ($1.91/share); excluding special items, net income was $215 million ($2.40/share), up from $208 million ($2.31/share) in Q1 2025, with net sales rising to $2.4 billion from $2.1 billion.

• Special items totaled $44 million, mainly from Wallula mill restructuring, Greif acquisition/integration, and facility closures.

• The Greif acquisition, completed for $1.8 billion, added significant production capacity, boosting sales and EBITDA but increasing depreciation and interest expenses.

• Operational performance was strong, with record production at Jackson, improved efficiency across mills, and Greif integration progressing.

Financial highlights

• EBITDA excluding special items was $485.5 million, up from $421.1 million; consolidated EBITDA was $476.5 million.

• Adjusted EPS increased by $0.09 year-over-year, driven by higher prices/mix, lower fiber and maintenance costs, and improved operational efficiency.

• Packaging segment EBITDA (ex-special items) was $482 million on $2.2 billion sales (22% margin), up from $409 million on $2 billion sales (20.8% margin); Paper segment EBITDA was $38 million on $160 million sales (23.6% margin).

• Free cash flow was $164 million after $165 million CapEx; $112 million paid in dividends and $59 million in share repurchases.

• Interest expense rose to $32.6 million from $12.9 million, mainly due to Greif acquisition financing.

Outlook and guidance

• Q2 2026 earnings expected at $2.33/share (ex-special items), with higher prices and improved mix in Packaging and Paper segments.

• Price increases for containerboard and corrugated products to benefit results mainly in Q3.

• Higher costs expected for freight, fiber, chemicals, and stock compensation in Q2; energy costs seasonally lower.

• CapEx forecasted at $840–$870 million and DD&A at $700 million for 2026.

• Q2 earnings projected to be lower than Q1, excluding special items, due to higher maintenance and compensation expenses and a higher tax rate.