Packaging Corporation of America (NYSE:PKG) reported record first quarter net income of $104 million, or $1.09 per share. Earnings included charges for special items related to facilities closure costs of $1.9 million. Excluding special items, first quarter 2016 net income was $106 million, or a record $1.11 per share, compared to first quarter 2015 net income of $100 million, or $1.01 per share. First quarter net sales were $1.4 billion in both 2015 and 2016.
Excluding special items, the $.10 per share increase in first quarter 2016 earnings, compared to the first quarter of 2015, was driven primarily by higher containerboard and corrugated products volumes ($.03), lower annual mill outage costs ($.08), lower costs for fiber ($.06), energy ($.06), and freight ($.04) as well as a lower share count ($.04) resulting from share repurchases. These items were partially offset by lower white paper prices and mix ($.04), lower containerboard export prices ($.03), lower domestic containerboard and corrugated products prices and mix ($.03), lower pulp volume ($.02), higher labor costs ($.01), higher depreciation ($.03), higher interest expense ($.02), and a state incentive received in 2015 related to investments at our DeRidder mill ($.02).
Packaging segment EBITDA, excluding special items, in the first quarter of 2016 was $235 million with sales of $1.1 billion compared to first quarter 2015 EBITDA of $222 million with sales of $1.1 billion. Corrugated products shipments were up 3.4% in total and up 1.7% per workday compared to the first quarter of 2015. Containerboard production was 897,000 tons which was a 15,000 ton increase compared to the first quarter of 2015. Containerboard inventories ended the quarter flat with the first quarter of 2015 and year-end 2015 levels.
Paper segment EBITDA, excluding special items, in the first quarter of 2016 was a record $51 million with sales of $281 million compared to first quarter 2015 EBITDA of $49 million with sales of $297 million. White paper sales volume was flat with the first quarter of 2015 while price and mix were lower. Sales volume and mix were favorable compared to the fourth quarter of 2015 while prices were slightly lower.
Packaging Corporation of America earnings per share showed an increasing trend of 12% for the current fiscal year. The company’s expected EPS growth rate for next fiscal year is 476%.Analysts project EPS growth over the next 5 years at 7.17%. It has EPS annual growth over the past 5 fiscal years of 17.4% when sales grew 18.7. It reported -1.7% sales drop, and 18.2% EPS growth in the last quarter.
The stock is trading at $68.23, up 55.52% from 52-week low of $44.32. The stock trades down -4.72% from its peak of $73.6 and 1.13% above the consensus price target of $69. Its volume clocked up at 1.1 million shares which is higher than the average volume of 1.05 million shares. Its market capitalization currently stands at $6.37B.
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