Packaging Corp. of America Earnings Preview

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After beating estimates last quarter by $0.05, Packaging Corporation of America (NYS: PKG) has set the standard for itself. The company will unveil its latest earnings on Monday, Oct. 17. Packaging Corp. of America is a producer of containerboard and corrugated products in the United States. It is comprised of mills and corrugated manufacturing operations.

What analysts say:

  • Buy, sell, or hold?: Analysts are very bullish on this stock, unanimously backing it as a buy. Analysts like Packaging Corp. of America better than competitor Graphic Packaging overall. Four out of five analysts rate Graphic Packaging a buy compared to nine of nine for Packaging Corp. of America. Analysts still rate the stock a moderate buy, but they are a bit more wary about it compared to three months ago.
  • Revenue Forecasts: On average, analysts predict $663 million in revenue this quarter. That would represent a rise of 3.1% from the year-ago quarter.
  • Wall Street Earnings Expectations: The average analyst estimate is earnings of $0.43 per share. Estimates range from $0.41 to $0.44.

What our community says:
CAPS All-Stars are solidly behind the stock with 96.6% granting it an "outperform" rating. The community at large backs the All-Stars with 92.7% assigning it a rating of "outperform." Fools are bullish on Packaging Corp. of America, though the message boards have been quiet lately with only 51 posts in the past 30 days. Packaging Corp. of America has a bullish CAPS rating of five out of five stars that is about on par with the Fool community assessment.

Management:
Packaging Corp. of America's profit has risen by an average of 30.1% over the past five quarters. Revenue has now gone up for three straight quarters.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters. 

QuarterQ2Q1Q4Q3
Gross Margin20.6%21.2%23.5%25.9%
Operating Margin10.2%10.5%15.4%(1.9%)
Net Margin5.9%5.9%8.8%14.5%
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