Liz Gyekye / PackagingNews

Packaging Corp. Q3 profit falls as material costs rise

Packaging Corporation of America has announced that its quarter three earnings fell as costs increased for transportation, energy and raw materials.

For the quarter ended 30 September, net income was $41.8 million, or 42 cents per share, compared with $93.3 million, or 91 cents per share, a year earlier.

The US-based containerboard and corrugated packaging company said higher costs took 18 cents per share away from earnings, with the biggest increases for transportation, recycled fiber, labour, energy and chemicals.

Elsewhere, net sales were $671m, up 4.4% compared to the third quarter of 2010, and year-to-date net sales were $2bn, up 8.7% over 2010.

Corrugate products shipments were up 6.6%, including 1.4% from acquisitions, and outside sales of containerboard were equal to last year’s third quarter.

Containerboard production was 650,000 tonnes, up 4,000 tonnes over the third quarter of 2010.

‘Lower volumes of corrugated products in Q4’

Packaging Corporation of America chief executive Mark W. Kowlzan said: “Our corrugated products demand remained strong throughout the quarter. Our mills and box plants ran exceptionally well setting quarterly records for production and sales.

“Cost inflation, however, continued to impact our results and remains a concern. Finally, our major energy projects at our Counce, Tennessee and Valdosta, Georgia linerboard mills remain on schedule for a 1 December completion.

“Looking ahead to the fourth quarter, corrugated products volume and mill production should be lower than the third quarter with four less corrugated products shipping days and the normal seasonal decline in demand. We expect higher costs with lower mill and box plant volume, higher energy usage with colder weather, and higher interest expense.”