Packaging Corporation of America reported full year net sales were $7.0 billion in both 2019 and 2018.
The company reported last week on the fourth quarter and full year 2019 results, noting its full year 2019 net income was $696 million, or $7.34 per share, and net income of $726 million, or $7.65 per share, excluding special items.
It reported its fourth quarter 2019 net income of $136 million, or $1.43 per share, and net income of $163 million, or $1.71 per share, excluding special items. Fourth quarter net sales were $1.7 billion in both 2019 and 2018.
Mark W. Kowlzan, PCA chairman and CEO, said the paper segment system was operated “to demand, however we had solid volume which came in better than anticipated, and we reduced our office paper inventory by almost 10 percent compared to the third quarter of 2019. Prices and mix were lower as expected, but also slightly better than anticipated. Our paper mills operated very well with great cost control throughout the quarter.”
Kowlzan also said the containerboard system continued to be operated “to demand in a very cost-effective manner. Our mill production supplied the necessary containerboard to achieve a new all-time quarterly record for box shipments per day and a new fourth quarter record for total box shipments, allowing us to maintain our industry leading integration rate.”
Looking ahead to the first quarter, Kowlzan said, he expects first quarter earnings of $1.20 per share.
“In our paper segment, volumes will be lower due to the better than expected levels in the fourth quarter as well as the scheduled outage we have at our Jackson mill,” he said. “Scheduled outage costs will be significantly higher with four scheduled in the first quarter versus just one in the fourth quarter of 2019. Freight costs will be higher due to rail rate increases in certain areas and scheduled outage-related increases. Labor and benefits costs will be higher with annual wage increases and other timing-related expenses. There will be inflation with purchased electricity and most of our chemical and repair and materials costs, while seasonally colder weather will increase energy and wood costs. We also expect our tax rate and depreciation expense to be slightly higher.”