Packaging Corporation of America (package – Free Report) will release its fourth quarter 2022 results after the closing bell on January 25.
Third quarter results
In its last reported quarter, Packaging Corp’s revenue increased year-over-year, in line with Zachs consensus expectations. Revenue increased year over year but fell short of Zacks Consensus Estimate.
PKG’s fourth quarter earnings forecast is 13.2% on average.
Packaging Corporation of America Pricing and EPS Surprise
Packaging Corporation of America Price-eps-surprise | Packaging Corporation of America Quote
The Zacks consensus estimate for Packaging Corp’s fourth-quarter earnings per share is pegged at $2.24, suggesting an 18.8% decline from the level reported in the same period last year.
Zacks Consensus projected total revenue of $2.05 billion, up 0.6% from the number reported in the year-ago quarter.
The Packaging Corporation’s fourth quarter results are expected to reflect the impact of weak packaging demand as global and domestic economic conditions deteriorate due to ongoing inflationary pressures, high interest rates and supply chain disruptions. expected. Customers are working to reduce high inventory levels that are impacting order flow and demand for PKG’s products.
Given that packaged products are integral to the distribution of food, beverages, and pharmaceuticals, growth in demand for these products and e-commerce activity may have boosted the performance of the packaged segment. This segment generates approximately 91% of PKG’s revenue.
The fourth quarter had four fewer shipping days than the third quarter, resulting in a decrease in total box shipments. Therefore, the company had expected lower volumes in the packaging segment.
The Zacks consensus estimate for the segment’s quarterly revenue is pegged at $1.905 billion, suggesting growth of 1.7% from the reported numbers in the same period last year. The operating profit consensus mark for the segment was pegged at $289 million, representing a 22% decline from the number reported last year.
In the paper division, the company likely benefited from price increases implemented in September, although volumes may have been lower than in a seasonally strong third quarter. Scheduled outage costs are expected to be higher. Expected higher operating costs, primarily labor and benefits, and higher energy costs due to the expected colder weather are expected to hurt segment earnings in the current quarter.
The Zachs consensus forecast for Paper division revenue is pegged at $152 million for the December quarter, suggesting 6.2% growth from the previous year’s reported value. The Zachs Consensus estimate for segment operating profit was pegged at $28 million, representing a 33.3% increase from his reported $21 million in the same period last year.
What the model shows
Our tried-and-true model is not a definitive predictor of Packaging Corp’s earnings this season. A combination of positive earnings ESP and a Zacks rank of 1 (strong buy), 2 (buy), or 3 (hold) increases the likelihood of winning above earnings. But that is not the case here, as shown below.
Earnings ESP filters help you find the best stocks to buy or sell before they’re reported.
Revenue ESP: PKG’s earnings ESP is -0.22%.
zack rank: The company currently holds a Zacks Rank #3.you can see See the full list of today’s Zacks #1 ranked stocks here.
price performance ratio
Over the past year, Packaging Corp’s stock has fallen 3% compared to the industry’s 1.2% decline.
Image Source: Sachs Investment Research
Stocks to consider
Our model shows these have the right mix of factors to beat the gains on their next release, so here are some industrial stocks worth considering .
Dear & Company (DE – Free Report) currently has a Revenue ESP of +2.83% and a Zacks Rank of #2. The Zacks consensus forecast for DE’s first quarter fiscal year 2023 earnings is up 2.6% over the past 60 days and is currently pegged at $5.49 per share.Consensus marks suggest 88.1% year-on-year growth
The Zachs consensus forecast for DE’s quarterly revenue is pegged at $11.4 billion, representing 33.9% growth from the reported level in the same period last year. DE’s guidance for the fourth quarter is 7.1% on average.
xylem (xyl – Free Report) currently has a Revenue ESP of +2.10% and a Zacks Rank of #3. The Zacks consensus forecast for fourth quarter 2022 earnings has remained unchanged for the past 60 days and is pegged at 79 cents per share. This suggests a year-on-year growth of 25.4%.
XYL’s Zacks consensus forecast for quarterly revenue is pegged at $1.4 billion, representing 6.1% year-over-year growth. XYL’s Q4 earnings forecast averages 13.3%.
Illinois Tool Works (ITW – Free Report) currently has a Revenue ESP of +1.92% and a Zacks Rank of #3. The Zacks consensus forecast for fourth quarter 2022 earnings is pegged at $2.61 per share, up 0.4% over the last 60 days. This suggests a year-on-year growth of 33.8%.
The Zacks consensus forecast for quarterly revenue is pegged at $3.9 billion, representing 5.3% growth from the reported level in the year-ago quarter. ITW expects fourth quarter earnings to average 4.2%.
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