PCA: Corrugated Products Customers ‘Cautious’ Amid Economic Uncertainty
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Recycling Today reports that despite seeing “cautious ordering patterns” from customers, Packaging Corp. of America (PCA) reports strong margin performance in both its Packaging and Paper segments, and has posted slight increases in net sales, income and earnings before interest, taxes, depreciation and amortization (EBITDA).
The Lake Forest, Illinois-based paper packaging company, which recently agreed to purchase the containerboard business of Delaware, Ohio-based packaging company Greif Inc. in a $1.8 billion deal, saw its net sales go from $2.08 billion in the second quarter of 2024 to $2.17 billion in the second quarter of this year.
PCA’s overall net income came in at $241.5 million in this year’s second quarter compared with $199 million last year, and its second quarter 2025 EBITDA was $474.4 million compared with $404.5 million in the same period last year.
PCA’s overall net income came in at $241.5 million in this year’s second quarter compared with $199 million last year, and its second quarter 2025 EBITDA was $474.4 million compared with $404.5 million in the same period last year.
The company’s Packaging segment, in particular, posted results consistent with its expectations as PCA fully realized previously announced price increases.
Packaging
In the Packaging segment, PCA posted sales of $2.01 billion in this year’s second quarter compared with $1.91 billion last year, as well as $346.3 million in operating income and $452.9 million in EBITDA—both increases compared with the second quarter of 2024.
However, Kowlzan also noted “cautious ordering patterns” from its corrugated products customers and says PCA’s export containerboard sales were down this quarter.
In the Packaging segment, PCA posted sales of $2.01 billion in this year’s second quarter compared with $1.91 billion last year, as well as $346.3 million in operating income and $452.9 million in EBITDA—both increases compared with the second quarter of 2024.
However, Kowlzan also noted “cautious ordering patterns” from its corrugated products customers and says PCA’s export containerboard sales were down this quarter.
“We operated very well during the quarter, delivering strong earnings and cash flows as well as higher margins in the Packaging segment,” Kowlzan says. “Pricing in the Packaging segment was consistent with expectations as we fully realized our earlier announced price increases.
“Despite cautious ordering patterns from customers, corrugated products volume was solid and steady throughout the quarter, with per-day shipments exceeding the second quarter of 2024 and the first quarter of 2025. As expected, export containerboard sales were lower. We ran our containerboard mills to meet demand and drew down inventory to end at targeted levels.”
During the company’s earnings call July 24, Thomas Hassfurther, executive vice president of corrugated products, provided more insight into the export landscape.
“Export containerboard sales have been noticeably lower due to global trade tensions,” he said on the call. “We have chosen not to participate in certain markets under the current conditions, which has impacted our sales volumes.”
Paper
Sales were softer in PCA’s Paper segment.
Sales were softer in PCA’s Paper segment.
The company posted $145.8 million in sales for the second quarter of 2025, down from $150.1 in the second quarter last year, as well as $25.8 million in operating income, down from 2024, and $30.3 million in EBITDA this year compared with $30.6 million last year.
“The Paper segment delivered another profitable quarter with strong margin performance, as we realized our earlier price increases,” Kowlzan says. “We continued to successfully manage costs across all of our operations, executing our capital projects and efficiency initiatives, which have helped offset inflation.”
Looking ahead, Kowlzan expects higher corrugated shipments that are expected to drive increased containerboard production despite continued caution from customers as economic uncertainty persists.
He also says export containerboard sales will continue to be soft because of the effects of the global trade environment.
He also says export containerboard sales will continue to be soft because of the effects of the global trade environment.
“We will build some containerboard inventory ahead of our fourth quarter maintenance outage at the DeRidder mill,” Kowlzan says. “We expect prices and mix in the Packaging segment to be relatively flat. We also expect flat pricing in the Paper segment and expect production and sales to increase with the International Falls mill outage completed in the second quarter and seasonal back-to-school orders. We have no scheduled maintenance outages during the third quarter and expect maintenance outage expense to be lower.
“Freight costs will be higher with the full effect of rail rate increases at our mills. Operating costs will be near second-quarter levels and fiber costs will be slightly lower.”
As for the Greif acquisition, Kowlzan said during the earnings call that the move will increase PCA’s recycled mix to around 30 percent and provide opportunities to serve new customer segments and enhance its capabilities with Greif’s 100 percent recycled mill, allowing PCA to optimize freight and fiber costs.
“Considering these items, we expect third quarter earnings of $2.80 per share, excluding special items,” he says. “Our guidance does not include any possible impact from the pending acquisition of the Greif containerboard business, which is subject to satisfaction of certain conditions, including regulatory approval.”
