Packaging Corporation of America (PKG 0.29%), a major North American producer of containerboard and corrugated packaging, reported its second quarter 2025 earnings on July 23, 2025. The company delivered non-GAAP diluted earnings per share of $2.48.—above the analyst estimate of $2.44 (non-GAAP), and higher than its own non-GAAP guidance of $2.41. Revenue (GAAP) came in at $2.17 billion, which was under the analyst forecast of $2.19 billion. The quarter featured continued gains in profitability, especially in the Packaging segment, but moderate sales growth. Overall, the results highlighted ongoing cost control, steady demand in core markets, and resilience despite higher operating costs and a slight revenue miss (GAAP).
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) (Diluted, Consolidated) | $2.48 | $2.44 | $2.20 | 12.7 % |
| Revenue (GAAP, Consolidated) | $2.17 billion | $2.19 billion | $2.08 billion | 4.6 % |
| Packaging Segment Operating Income (Non-GAAP) | $321.7 million | $279.9 million | 14.9 % | |
| Paper Segment Operating Income (Non-GAAP) | $25.8 million | $26.1 million | -1.1 % | |
| EBITDA (Non-GAAP, Consolidated) | $450.8 million | $404.0 million | 11.6 % |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
Understanding Packaging Corporation of America's Business
Packaging Corporation of America is the third largest containerboard and corrugated packaging producer in North America. Its operations include eight mills and 86 packaging plants, producing materials used in e-commerce shipping, food packaging, and retail displays. The company is also active in white paper products, though these account for a smaller share of its profit.
The business focus is on maximizing production capacity, managing costs, and sourcing raw materials efficiently. Success depends on operating its mills and plants at high efficiency, maintaining strong customer relationships, and offering both standard and custom packaging solutions. Sustainability and energy efficiency are increasingly important, reflecting customer and regulatory demands and helping control costs.
Quarter Highlights and Key Performance Drivers
During the quarter, despite revenue growth that only slightly exceeded the previous year, the Packaging segment, which manufactures corrugated boxes and containerboard, drove most of the improvement. Packaging segment operating income rose 23.8% year-over-year, supported by higher pricing, product mix, and disciplined execution on cost savings.
Corrugated product shipments—which include boxes used in shipping and retail—grew 1.7% per day compared to Q2 2024. While overall shipments were flat year over year, per-day growth is positive given one fewer workday. A result of successfully passing through previously announced price increases across both contract and non-contract customers. The company also noted higher expenses in maintenance, freight, and operating costs, but offset these with efficiency projects and lower raw material costs, especially for fibers.
The company’s containerboard segment saw production of 1,195,000 tons. Efforts to control inventory led to a 17,000 ton reduction from the previous quarter, keeping current stock levels in line with demand. Investment in new, modern plants—such as the Glendale, Arizona, facility—has improved plant efficiency, allowing the company to produce more boxes per employee and meet the needs of a growing, diverse customer base. Energy costs remain a focus, with most mills using self-generated biogenic (plant-sourced) fuels to offset purchased energy, supporting both cost savings and the company’s sustainability objectives.
The Paper segment, which produces white office and printing paper, continued to see volume pressure, with sales volume down 5% from the second quarter of 2024 and 7% from the first quarter of 2025. Despite lower volume, strong pricing helped maintain stable margins. This trend reflects industry-wide declines in demand for office paper. Management continued its attention to efficiency and cost control within this segment, keeping it profitable as the market shifts away from traditional paper.
Looking Forward: Guidance and Key Watch Points
For the third quarter of 2025, Packaging Corporation of America projects non-GAAP diluted earnings per share of $2.80 for the third quarter of 2025. This guidance was issued without including potential impacts from a pending acquisition of the Greif containerboard business. Management expects higher corrugated shipments in packaging, along with increased production and sales in paper, flat pricing is expected in the Paper segment, and stable operating costs. No major plant outages are planned, which should help limit expense growth. However, rising freight costs are expected in Q3 2025 due to new rail contracts.
The company did not report any change to its quarterly dividend within this release. Looking forward, investors will want to monitor the ongoing effects of freight rate hikes, commodity cost trends, and any regulatory or customer moves related to sustainability. The company expects modest volume growth in its main packaging business and remains focused on cost discipline as it invests in new capacity.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
