PKG Filings — Packaging Corp of America - FilingSpy
PKG
Packaging Corp of America
A maker of the corrugated shipping boxes and paper that move goods to stores and doorsteps, and one of North America's largest containerboard producers. Its packaging arm turns fiber into the brown boxes, displays, and specialty cartons used by thousands of customers, while a separate paper mill produces copy and specialty paper. The company was formed in 1959 through the merger of three older packaging firms, and its roots trace back to an 1867 mill in Quincy, Illinois.
PCA's Q2 revenue rose 15% to $2.49B on the Greif acquisition, but net income fell 20% as higher freight, operating costs, and interest expense weighed on margins.
The Greif acquisition added $258 million in , but higher costs and pulled earnings lower. Revenue rose 14.7% to $2.49 billion while fell 20.5% to $192.1 million, as a 1.7-point decline in to 20.6% and a $20 million increase in net interest expense more than offset the acquisition's top-line contribution. The company enters the second half carrying $3.97 billion in debt and counting on two announced price increases to restore margins.
Key takeaways
Packaging rose 15.2% to $2.31 billion, including $258 million from the acquired Greif business and $58 million from higher legacy volume, partially offset by $11 million in lower price and mix.
fell 20.5% to $192.1 million, as higher freight costs, a $20 million increase in net to $33 million from acquisition financing, and $18 million in outweighed the acquisition-driven gain.
contracted 1.7 points to 20.6%, pressured by higher freight and operating costs and the effect of the acquisition, though it improved 1.5 points sequentially from Q1 2026.
Section summaries
Management's Discussion and Analysis
Q2 2026 net sales rose 14.7% to $2.49B driven by the Greif acquisition, while net income fell to $192M on higher freight, operating costs, and interest expense.
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Packaging increased 15.2% to $2.31B, with $258M from the acquired Greif business and $58M from higher legacy volume, partially offset by $11M in lower price/mix.
Packaging excluding rose to $489M from $453M, driven by the acquisition and higher legacy volume, but pressured by higher freight, lower price/mix, and increased operating costs.
Paper rose to $34 million from $26 million a year ago, driven by lower maintenance outage expense, higher volume, and better prices and mix.
for the first six months rose 25.5% to $376.0 million, and rose 30.9% to $170.1 million, aided by higher earnings before acquisition-related financing costs.
Management expects Q3 earnings, excluding , to exceed Q2, citing Packaging price and mix improvements from two announced increases and lower maintenance outage expenses.
What changed
Q1 2026 flagged legacy corrugated shipment declines as a watch item; in Q2, legacy volume contributed $58 million in higher , indicating the per-workday decline stabilized or reversed.
Q1 2026 flagged whether price and fiber cost benefits could overcome higher operating and outage costs; in Q2, lower price and mix ($11 million) and higher freight and operating costs more than offset fiber benefits, and remained below the prior year at 20.6%.
Q1 2026 flagged the ODP Corporation contract phase-down with no update; the Q2 filing again disclosed no resolution, and ODP remained the dominant Paper customer with the phase-down set to have begun in January 2026.
Management's Q2 had called for lower sequential earnings excluding due to higher outage, freight, fiber, and chemical costs; actual Q2 of $192.1 million was below Q1's $170.9 million on a basis but the sequential direction excluding special items is not separately quantified in the filing.
What to watch
Q3 price and mix realization: management cited two announced price increases as the driver of expected sequential earnings improvement; whether these increases hold in the market will determine if the contraction reverses.
Legacy corrugated shipment trajectory: after a per-workday decline in Q3 2025 and a mixed Q1 2026, the $58 million in higher legacy volume in Q2 suggests stabilization; whether this continues will set the organic top-line path.
Greif acquisition integration costs: the effect on persisted in Q2; whether these costs moderate as the acquired mills reach targeted profitability will determine the deal's near-term earnings contribution.
ODP Corporation contract: with the phase-down set to have begun in January 2026 and no renewal announced, any update on renegotiation or replacement customers will materially affect the Paper , where ODP represented 58% of 2025 sales.
Paper improved to $34M from $26M, primarily due to lower maintenance outage expense, higher volume, and better prices/mix.
decreased to $192M from $242M, as higher freight costs, increased from Greif acquisition financing, and expense of $18M weighed on results.
The company expects Q3 earnings to be higher than Q2, excluding , driven by Packaging price/mix improvements from two announced increases and lower maintenance outage expenses.
Liquidity remains strong with $443M in cash, $573M in available capacity, and of $705M for the first six months of 2026.
Quantitative and Qualitative Disclosures About Market Risk
For a discussion of market risks related to PCA, see Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Market Risk and Risk Management Policies” in this Quarterly Report on Form 10-Q.
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For a discussion of market risks related to PCA, see Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Market Risk and Risk Management Policies” in this Quarterly Report on Form 10-Q.
The disclosure set forth under the caption “Legal Proceedings” in Note 19, Commitments, Guarantees, Indemnifications and Legal Proceedings, of the Condensed Notes to Unaudited Quarterly Consolidated Financial Statements in “Part I, Item 1. Financial Statements” of this Form 10-Q…
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The disclosure set forth under the caption “Legal Proceedings” in Note 19, Commitments, Guarantees, Indemnifications and Legal Proceedings, of the Condensed Notes to Unaudited Quarterly Consolidated Financial Statements in “Part I, Item 1. Financial Statements” of this Form 10-Q is incorporated herein by reference.
There have been no material changes to the risk factors disclosed in “Part I, Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025.
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There have been no material changes to the risk factors disclosed in “Part I, Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025.