Packaging Corp of America (PKG) Stock: Earnings Beat, Revs, Guidance Don’t

Packaging Corp of America (NYSE:PKG), a Lake Forest, Illinois-based steel paper and corrugated containerboard, reported fiscal fourth quarter earnings on Monday afternoon. It whiffed on revenue and Q1 guidance, but earnings actually came in higher than expected

PKG Earnings

Packaging Corporation of AmericaPKG stock analysts — there are 12 covering the company — were looking for earnings per share of $1.03 in Q4 2015, down 11.2% from the $1.16 per share it earned in Q4 2014. Wall Street expected revenue to fall slightly, dipping 0.3% to $1.43 billion in Q4 2015, down from…well, right around $1.43 billion in Q4 2014.

Here are the actual numbers PKG reported Monday afternoon:

  • Packaging Corp of America saw revenue fall 3% to $1.39 billion, missing the $1.43 billion estimate.
  • PKG reported earnings per share of $1.08, beating the $1.03 consensus EPS figure.

Due to annual wage increases, higher taxes, as well as higher energy costs due to seasonally colder weather, the company also issued disappointing Q1 EPS guidance of $1.00; analysts were looking for $1.08.

More About Packaging Corp of America Stock

As of its close on Monday, January 25, its market cap was $4.87 billion. Over the last three months, an average of 877,511 shares of PKG stock traded hands each day. It pays a 3.8% dividend, and PKG stock is down 37.3% in the last year, underperforming the -8% return of the S&P 500 by nearly 20 percentage points.

Going into today’s earnings report, Navellier Ratings, Powered by Portfolio Grader, had the following ratings for PKG stock:

Rating: Sell
Total Grade: D
Fundamental Grade: D
Quantitative Grade: D
Earnings Growth: B
Sales Growth: D

We’ll have to wait and see how investors takes the most recent PKG earnings report, but in early after hours trading, PKG stock was down only slightly, off 0.16%. Before the numbers even came out, shares plunged 13% on Monday, driven by research firm Macquarie, which downgraded the stock from “Neutral” to “Underperform.” Citigroup also downgraded the stock before earnings, doubling down on the pain.

At the time this story was written, Robert Martin had no position in any of the stocks mentioned.

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