Packaging Corporation of America (NYSE:PKG) Posts Q2 CY2026 Sales In Line With Estimates

Barchart·07/22/2026 17:22:10

Packaging Corporation of America (NYSE:PKG) met Wall Street’s revenue expectations in Q2 CY2026, with sales up 14.7% year on year to $2.49 billion. Its GAAP profit of $2.15 per share was 6.6% below analysts’ consensus estimates.

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Commenting on reported results, Mark W. Kowlzan, Chairman and CEO, said, “We achieved an all-time quarterly record in total corrugated shipments in our legacy corrugated operations. Demand remained strong throughout the entire quarter, and we began to meaningfully realize the first of our previously announced price increases in the corrugated products business. The acquired Greif business contributed to earnings, driven by strong volumes at the corrugated plants and improved operational performance at the mills, with production consistently exceeding capabilities at the time of the acquisition. We continued to operate our mill system at full capacity and reduced export sales by approximately 30,000 tons from first quarter levels to support our corrugated products demand. Our volumes and outstanding operating performance across our businesses helped us mitigate significantly higher freight and recycled fiber costs.”

Company Overview

Founded in 1959, Packaging Corporation of America (NYSE: PKG) produces containerboard and corrugated packaging products as well as displays and package protection.

Revenue Growth

A company’s long-term performance is an indicator of its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Over the last five years, Packaging Corporation of America grew its sales at a mediocre 6.1% compounded annual growth rate. This was below our standard for the industrials sector and is a poor baseline for our analysis.

We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. Packaging Corporation of America’s annualized revenue growth of 9.7% over the last two years is above its five-year trend, suggesting its demand recently accelerated.

Packaging Corporation of America also reports its number of units sold, which reached 1.42 million in the latest quarter. Over the last two years, Packaging Corporation of America’s units sold averaged 5.9% year-on-year growth. Because this number is lower than its revenue growth, we can see the company benefited from price increases.

This quarter, Packaging Corporation of America’s year-on-year revenue growth was 14.7%, and its $2.49 billion of revenue was in line with Wall Street’s estimates.

Looking ahead, sell-side analysts expect revenue to grow 9.6% over the next 12 months, similar to its two-year rate. This projection is commendable and suggests the market sees success for its products and services.

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Operating Margin

Packaging Corporation of America has been an efficient company over the last five years. It was one of the more profitable businesses in the industrials sector, boasting an average operating margin of 14%. This result was particularly impressive because of its low gross margin, which is mostly a factor of what it sells and takes huge shifts to move meaningfully. Companies have more control over their operating margins, and it’s a show of well-managed operations if they’re high when gross margins are low.

Analyzing the trend in its profitability, Packaging Corporation of America’s operating margin decreased by 6.7 percentage points over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability.

This quarter, Packaging Corporation of America generated an operating margin profit margin of 11.7%, down 3.7 percentage points year on year. Since Packaging Corporation of America’s operating margin decreased more than its gross margin, we can assume it was less efficient because expenses such as marketing, R&D, and administrative overhead increased.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Packaging Corporation of America’s EPS grew at a weak 2.9% compounded annual growth rate over the last five years, lower than its 6.1% annualized revenue growth. This tells us the company became less profitable on a per-share basis as it expanded due to non-fundamental factors such as interest expenses and taxes.

We can take a deeper look into Packaging Corporation of America’s earnings to better understand the drivers of its performance. As we mentioned earlier, Packaging Corporation of America’s operating margin declined by 6.7 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its lower earnings; interest expenses and taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

For Packaging Corporation of America, its two-year annual EPS declines of 1.7% show it’s continued to underperform. These results were bad no matter how you slice the data.

In Q2, Packaging Corporation of America reported EPS of $2.15, down from $2.67 in the same quarter last year. This print missed analysts’ estimates. Over the next 12 months, Wall Street expects Packaging Corporation of America’s full-year EPS to grow 50.7% from $7.70 to $11.60.

Key Takeaways from Packaging Corporation of America’s Q2 Results

We struggled to find many positives in these results. Its EPS missed and its EPS guidance for next quarter fell short of Wall Street’s estimates. Overall, this was a weaker quarter. The stock traded down 2.6% to $222 immediately after reporting.

Packaging Corporation of America didn’t show its best hand this quarter, but does that create an opportunity to buy the stock right now? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).

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