Packaging Corp of America Earnings Preview

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Packaging Corp of America (NYS: PKG) beat estimates by $0.01 last quarter and investors are hoping it can beat them again. The company will unveil its latest earnings on Monday, Jan. 23. 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 bullish on this stock, with eight analysts rating it as a buy and only one rating it as a sell. Analysts don't like Packaging Corp of America as much as competitor Graphic Packaging Holding overall. While analysts still rate the stock a moderate buy, they are a little more optimistic about it compared to three months ago.
  • Revenue forecasts: On average, analysts predict $637.1 million in revenue this quarter. That would represent a rise of 1.7% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.37 per share. Estimates range from $0.35 to $0.37.

What our community says:
CAPS All-Stars are solidly behind the stock, with 96.7% assigning it an outperform rating. The community at large agrees with the All-Stars, with 93.3% giving it a rating of outperform. Fools are keen 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 year over year by an average of 9.2% over the past five quarters. Revenue has now gone up for three straight quarters. The company's gross margin shrank by 5.4 percentage points in the last quarter. Revenue rose 4.4% while cost of sales rose 11.9% to $533.1 million from a year earlier.

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.

Quarter

Q3

Q2

Q1

Q4

Gross Margin

20.5%

20.6%

21.2%

23.5%

Operating Margin

10.6%

10.2%

10.5%

15.4%

Net Margin

6.2%

5.9%

5.9%

8.8%

For all our Packaging Corp of America-specific analysis, including earnings and beyond, add Packaging Corp of America to My Watchlist.

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Earnings estimates provided by Zacks.

At the time this article was published

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