Packaging Corporation of America (NYSE: PKG) today reported first quarter 2018 net income of $140 million, or $1.48 per share and $1.55 per share excluding special items. First quarter net sales were $1.7 billion in 2018 and $1.5 billion in 2017.
Reported earnings include $.07 per share of special items expense in the first quarter of 2018 and $.03 per share of special items expense in the first quarter of 2017. Excluding special items, the $.28 per share increase in first quarter 2018 earnings compared to first quarter 2017 was driven primarily by higher prices and mix $.39 and volumes $.19 in our Packaging segment, higher volumes in our Paper segment $.02, and a favorable tax rate $.19 resulting from Tax Reform changes. These items were partially offset by lower prices and mix ($.05) in our Paper segment, higher operating costs ($.22), higher annual outage expenses ($.11), higher freight expense ($.07), higher converting costs ($.02), higher depreciation ($.03) and higher interest expense ($.01).
Results were $.03 above first quarter guidance of $1.52 per share primarily due to higher volumes and prices and mix in our Packaging and Paper segments, partially offset by higher than expected freight costs and operating costs.
In the Packaging segment, total corrugated products shipments with one less workday were up 6.0% and shipments per day were up 7.7% over last year’s first quarter. Containerboard production was 953,000 tons, and containerboard inventory was down 23,000 tons from the fourth quarter of 2017 and up 31,000 tons compared to the first quarter of 2017, primarily due to the addition of recently acquired Sacramento Container. In the Paper segment, office paper and printing and converting paper sales volumes were up 33,000 tons compared to the first quarter of 2017, and production volume was up 10,000 tons primarily due to no scheduled maintenance outages in the first quarter of 2018.
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