Packaging Corp of America (PKG)

Packaging Corporation of America reported third-quarter 2026 net income of $262 million, or $2.93 per share, on 21 October 1. Net sales were $2.6 billion, against $2.3 billion in the third quarter of 2025 1.

Leaving out special items such as plant closure and integration costs, net income was $272 million, or $3.04 per share, against $2.73 a year earlier 1. The company said 24 cents of the $0.31 gain came from the Greif mills and plants it bought a year earlier 1.

Total corrugated box shipments rose 10.6 percent, but shipments from the older plants, without Greif, fell 0.5 percent 1. Chairman and chief executive Mark Kowlzan said the mills ran at full capacity, while freight, recycled fiber and chemicals kept costs high 1.

The company expects fourth-quarter earnings of $2.81 per share excluding special items, with maintenance outages at three of its mills 1. The open question is how fast the Wallula mill cutback and the Greif integration lift results 13.

Packaging Corporation of America grew into the third largest maker of containerboard in North America, the paper that corrugated boxes are built from 2. It also makes office and printing paper at one mill 2.

In 2025 net sales rose 7.2 percent to $8,989 million 2. Packaging sales rose $603 million: $338 million from the newly bought business and $332 million from higher prices and product mix, less $67 million of lower sales from the older plants 2.

The turning point was the purchase of the containerboard business of Greif, which closed on 2 September 2025 for $1.8 billion in cash 2. It brought two mills with about 800,000 tons of capacity and eight sheet feeder and corrugated plants 2.

At the announcement, Reuters reported that the unit had about $1.2 billion of sales in the twelve months to 30 April 4. The company saw synergies of about $60 million within two years of closing 4. It planned to pay with $1.5 billion of new debt and cash on hand 4.

Profit did not follow sales, as net income fell to $774.1 million from $805.1 million, because special items cost $151 million in 2025 against $12 million in 2024 2. Wallula mill restructuring was $128 million of that 2.

The Wallula, Washington mill had its No. 2 machine idle from May 2025 3. On 3 December 2025 the company said it would shut that machine and its pulping plant for good, cutting about 200 jobs and 250,000 tons of yearly capacity 3.

Trade publications reported that North American corrugated shipments fell 1.8 percent in 2025, while the company's older plants were flat 2. In the second quarter of 2026, the company said it set an all-time quarterly record for shipments from those plants 5.

Packaging: containerboard and boxes

The Packaging segment makes linerboard and corrugating medium, the flat and rippled layers of a cardboard box, and turns them into shipping boxes, retail displays and food packaging 2. It made 5.2 million tons of containerboard in 2025 at mills with about 5.8 million tons of yearly capacity 2.

Packaging made 92.3 percent (computed) of 2025 net sales 2. Its third-quarter 2026 operating income was $397.8 million, against $327.5 million a year before 1.

About 12,000 customers buy from it, and about 70 percent of corrugated sales go to regional and local accounts 2. Food, beverages and farm products are 40 percent of corrugated use in the United States 2.

Paper

The Paper segment makes uncoated freesheet, the white paper used in copiers and printers, at one mill in International Falls, Minnesota, with about 500,000 tons of yearly capacity 2. It had 6.8 percent (computed) of 2025 net sales 2.

ODP Corporation, formerly Office Depot, is its largest paper customer, at 58 percent of the segment's sales in 2025 2. The supply agreement runs through 31 December 2026 and would phase down over two years if not renewed 2.

Plants and people

The company owns ten mills, in Counce, DeRidder, Filer City, Jackson, Massillon, Riverville, Tomahawk, Valdosta, Wallula and International Falls 2. It runs 91 corrugated plants and related sites, placed within about 150 miles of customers 2.

Mark Kowlzan has been chief executive since July 2010 and chairman since January 2016 2. Thomas Hassfurther became president in February 2025 2. The company had about 16,800 employees at the end of 2025 2.

Rivals and problems

The annual report names International Paper, Smurfit WestRock, Georgia-Pacific and Pratt Industries as main box rivals 2. In office paper it names Domtar and Sylvamo 2.

Current pressures are freight, recycled fiber and chemical costs, weaker farm-related box demand and a fire at a corrugated plant, the company said 1. Debt was $4.0 billion at the end of 2025 2.

The umbrella, in words

Its subsidiary list, Exhibit 21.1, includes PCA International Inc., Hexacomb Corporation, CorrChoice LLC, Boise White Paper, LLC and Minnesota, Dakota & Western Railway Company, each 100 percent owned 6. It owns 50 percent of Louisiana Timber Procurement Company, LLC 6.

It owns the buildings and land of its ten mills and 56 of its 91 corrugated operations, and its Lake Forest headquarters 2. The Greif mills at Massillon and Riverville joined with that deal 2.

The annual report describes one class of common stock, listed on the New York Stock Exchange as PKG, with 146 holders of record on 20 February 2026 2.

For the fourth quarter of 2026 the company expects earnings of $2.81 per share excluding special items 1. It expects maintenance outages at three mills and higher freight, recycled fiber, wood fiber, chemical and energy costs 1.

Kowlzan said on 21 October that prices for containerboard and corrugated products are expected to improve as earlier price increases are put in place 1. Paper volume is expected to be seasonally lower 1.

The company said on 3 December 2025 that about 140,000 tons of lightweight linerboard capacity is scheduled to come up at its Jackson mill in the fourth quarter of 2026 3. It expects the Wallula changes to lower that mill's cost by about $125 per ton from 2025 levels 3.

Reuters reported at the announcement that the company expected about $60 million of synergies from the Greif deal within two years of closing 4. The deal closed on 2 September 2025 2.

At 31 December 2025, $283.1 million remained available under the company's share repurchase authorization 2.