Yahoo Finance What's in Store for Packaging Corp's (PKG) Q1 Earnings?
Packaging Corporation of America PKG is set to release first-quarter 2023 results on Apr 24, after the closing bell.
Q4 Results
In the last reported quarter, Packaging Corp’s earnings beat the Zacks Consensus Estimate but decreased year over year. Revenues fell on a year-over-year basis and missed the Zacks Consensus Estimate.
PKG has a trailing four-quarter earnings surprise of 6.2%, on average.
Packaging Corporation of America Price and EPS Surprise
Packaging Corporation of America price-eps-surprise | Packaging Corporation of America Quote
Q1 Estimates
The Zacks Consensus Estimate for Packaging Corp’s first-quarter earnings per share is pegged at $2.27, suggesting a decline of 16.5% from the prior-year quarter’s reported level.
The Zacks Consensus Estimate for total sales is pinned at $2.08 billion, indicating a 2.6% decline from the year-ago quarter’s reported number.
Factors at Play
Packaging Corp’s first-quarter results are expected to reflect the impacts of the weakness in packaging demand, as global and domestic economic conditions have been unfavorable. The downside is caused by ongoing inflationary pressures, high interest rates and supply-chain disruptions. Customers have been working to reduce their high inventory levels, which have been affecting order flow and demand for PKG’s products.
Given that packaging products are essential for the distribution of food, beverage and pharmaceutical products, the demand for these products and growth in e-commerce activities are likely to have aided the performance of the Packaging segment. The segment generates around 91% of PKG's total revenues.
The first quarter had four additional shipping days than the fourth quarter, leading to higher total box shipments. Thus, the company anticipates higher sales volumes for the Packaging segment.
The Zacks Consensus Estimate for the segment’s quarterly revenues is pegged at $1,864 million, suggesting a decline of 5.4% from the year-ago quarter’s reported number. The consensus mark for the segment’s operating income is pinned at $287 million, indicating a fall of 20.9% from the prior-year reported figure.
In the Paper segment, while the company is likely to have gained from the price increase that took effect in September 2022, volume is likely to have been flat compared to the fourth quarter of 2022. Expected higher operating costs, primarily labor and benefit expenses, along with anticipated colder weather resulting in higher energy costs, are expected to have hurt the segment’s profits in the quarter under review.
The Zacks Consensus Estimate for the Paper segment’s revenues is pegged at $162 million for the March-end quarter, suggesting growth of 5.2% from the year-ago reported figure. The Zacks Consensus Estimate for the segment’s operating income is pinned at $31.7 million, indicating a 33.9% increase from the $23.7 million reported in the prior-year quarter.
What Our Model Indicates
Our proven model doesn’t conclusively predict an earnings beat for Packaging Corp this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here, as you can see below.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: PKG has an Earnings ESP of -0.07%.
Zacks Rank: The company currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Price Performance
Over the past year, shares of Packaging Corp have lost 3.7% compared with the industry’s fall of 11.2%
Image Source: Zacks Investment Research
Stocks to Consider
Here are some Industrial Products stocks worth considering, as our model shows that these have the right combination of elements to beat on earnings in their upcoming releases.
Ingersoll Rand Inc. IR is scheduled to report first-quarter 2023 results on May 3. It has an Earnings ESP of +2.32% and currently sports a Zacks Rank #1. The Zacks Consensus Estimate for first-quarter 2023 earnings is pegged at 52 cents per share. This suggests year-over-year growth of 6.1%.
The Zacks Consensus Estimate for IR’s quarterly revenues is pegged at $1.5 billion, indicating year-over-year growth of 10.7%. IR has a trailing four-quarter earnings surprise of 8.5%, on average.
A. O. Smith Corporation AOS is set to release its first-quarter 2023 results on Apr 27. AOS currently has an Earnings ESP of +5.78% and a Zacks Rank #2. The Zacks Consensus Estimate for first-quarter 2023 earnings is pegged at 77 cents per share, suggesting no year-over-year change.
The Zacks Consensus Estimate for AOS’ quarterly revenues is pegged at $913 million, indicating a year-over-year decline of 6.5%. The company has a trailing four-quarter earnings surprise of 3.2%, on average.
Illinois Tool Works ITW is scheduled to report first-quarter 2023 results on May 2. The company currently has an Earnings ESP of +1.49% and a Zacks Rank #3. The Zacks Consensus Estimate for first-quarter 2023 earnings is pegged at $2.19 per share. This suggests year-over-year growth of 3.8%
The Zacks Consensus Estimate for quarterly revenues is pegged at $4 billion, indicating growth of 0.6% from the prior-year quarter’s reported level. ITW has a trailing four-quarter earnings surprise of 0.9%, on average.
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Illinois Tool Works Inc. (ITW) : Free Stock Analysis Report
A. O. Smith Corporation (AOS) : Free Stock Analysis Report
Packaging Corporation of America (PKG) : Free Stock Analysis Report
Ingersoll Rand Inc. (IR) : Free Stock Analysis Report
