Packaging Corporation of America (PKG) Q3 2025 earnings summary

Executive summary

• Q3 2025 net income was $227M ($2.51/share), or $247M ($2.73/share) excluding special items, on net sales of $2.31B, up from $2.2B in Q3 2024; special items mainly related to the Greif acquisition and facility closures.

• Excluding special items, net income rose from $239M ($2.65/share) in Q3 2024, driven by improved legacy business earnings and higher prices/mix in Packaging, partially offset by a loss from the newly acquired Greif business.

• The Greif Acquisition, completed September 2, 2025 for $1.8B, added two containerboard mills and eight plants, with integration costs and higher interest expense affecting results.

• Excluding special items and acquisition, EPS increased year-over-year, driven by higher prices/mix in packaging, lower fiber costs, and improved Paper segment performance.

Financial highlights

• Q3 2025 net sales were $2.31B, up from $2.2B in Q3 2024; adjusted EBITDA was $503M, up from $461M.

• Packaging segment EBITDA margin improved to 23.1% from 22.2% last year; paper segment EBITDA margin was 24.9% vs. 27.1% in Q3 2024.

• Record quarterly cash from operations of $469M; free cash flow was $277M after $192M in capex.

• Quarter-end cash and marketable securities totaled $806M; liquidity was ~$1.4B.

• Long-term debt at September 30, 2025 was $3.97B, up from $2.47B at year-end 2024, reflecting Greif Acquisition financing.

Outlook and guidance

• Q4 2025 EPS guidance (excluding special items) is $2.40.

• Expect higher per-day corrugated shipments but three fewer shipping days in Q4; anticipate lower prices/mix in packaging and seasonally lower paper segment volume.

• Maintenance outage at DeRidder mill to increase costs by $0.29 per share.

• Significant operational improvements expected from acquired business in Q4, with continued integration costs and seasonally lower volumes.