Corrugated shipments rise 1.9 percent for Packaging Corp. in Q3 of 2019
Corrugated shipments rise 1.9 percent for Packaging Corp. in Q3 of 2019
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For the third quarter of 2019, Packaging Corp. of America, Lake Forest, Illinois, achieved a net income of $180 million and a net income of $182 million excluding special items. Third-quarter net sales were $1.8 billion in both 2019 and 2018, the company reports in its latest earnings report.
In the packaging segment, corrugated products shipments were up 1.9 percent in total and per day over the last year’s third quarter. Containerboard production was 1,070,000 tons and containerboard inventory decreased 30,000 tons from the second quarter of 2019 and down 51,000 tons compared to the third quarter of 2018. During the company’s third-quarter earnings call, the company reported that outside sales volumes of containerboard was about 26,000 tons below last year’s third quarter results since the company ran its containerboard system to current market demands.
Containerboard production was 1,070,000 tons and containerboard inventory decreased 30,000 tons from the second quarter of 2019 and down 51,000 tons compared to the third quarter of 2018.
In the paper segment, lower volumes in the third quarter of 2019 compared to last year were primarily due to discontinuing the paper business at the company’s Wallula Mill in Wallula, Washington.
“In our packaging segment, we continued to run our containerboard system to demand in a very cost-effective manner,” says Mark W. Kowlzan, chairman and CEO at Packaging Corp. of America. “Our mills supplied the necessary containerboard to achieve new shipment records in our box plants, and our inventory was below last year’s and second quarter levels. Average domestic prices were about where we expected based on the changes in the published domestic containerboard prices from earlier this year, however our corrugated products mix was slightly better.
“In the paper segment, volumes for our office paper and converting grades were slightly above the third quarter of 2018. Prices and mix were higher than last year’s third quarter, but moved lower compared to the second quarter of 2019, although at a slower rate than the published index prices.”
Q4 predictions
Looking ahead to the fourth quarter of 2019, Kowlzan says the company expects slightly lower prices in its packaging segment due to the impact of the published domestic containerboard price decreases from earlier this year and lower export prices. He says the company also expects a “less rich mix” in corrugated products and slightly lower shipments with one less shipping day.
He adds that containerboard sales volume will likely be lower as the company continues to work toward building inventory prior to the year end in preparation for scheduled maintenance outages in the first quarter of 2020 at three of the company’s largest containerboard mills.
In the company’s paper segment, Kowlzan says volumes are expected to be seasonally lower along with lower average prices. Also, with colder weather, energy costs will be higher, he says, so operating and converting costs will be higher as well, which includes the costs associated with the startup of the company’s new Richland, Washington, box plant in the fourth quarter of 2019. He adds that scheduled maintenance outage costs are also expected to be higher in the fourth quarter of 2019 for its paper segment than it was in the third quarter of 2019 for this segment.
Packaging Corp. of America is the third largest producer of containerboard products and the third largest producer of uncoated freesheet paper in North America. The company operates eight mills and 94 corrugated products plants and related facilities.
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Source: Recycling Today
Corrugated shipments rise 1.9 percent for Packaging Corp. in Q3 of 2019
<![CDATA[For the third quarter of 2019, Packaging Corp. of America, Lake Forest, Illinois, achieved a net income of $180 million and a net income of $182 million excluding special items. Third-quarter net sales were $1.8 billion in both 2019 and 2018, the company reports in its latest earnings report.In the packaging segment, corrugated products shipments were up 1.9 percent in total and per day over the last year’s third quarter. Containerboard production was 1,070,000 tons and containerboard inventory decreased 30,000 tons from the second quarter of 2019 and down 51,000 tons compared to the third quarter of 2018. During the company’s third-quarter earnings call, the company reported that outside sales volumes of containerboard was about 26,000 tons below last year’s third quarter results since the company ran its containerboard system to current market demands. Containerboard production was 1,070,000 tons and containerboard inventory decreased 30,000 tons from the second quarter of 2019 and down 51,000 tons compared to the third quarter of 2018. In the paper segment, lower volumes in the third quarter of 2019 compared to last year were primarily due to discontinuing the paper business at the company’s Wallula Mill in Wallula, Washington. “In our packaging segment, we continued to run our…