Packaging Corporation of America Reports 10.6% Revenue Growth in Q1 2026

Packaging Corporation of America (PCA) reported its financial results for the first quarter of 2026, revealing a net sales increase of 10.6% to $2.37 billion, compared to $2.14 billion in the same period last year. The company's net income for the quarter was $170.9 million, or $1.91 per diluted share, down from $203.8 million, or $2.26 per diluted share, in the first quarter of 2025. The decline in net income was attributed to $44 million in special items, primarily related to restructuring activities at the Wallula mill, compared to $4 million in special items in the prior year. Excluding these special items, net income rose to $215.2 million, or $2.40 per diluted share, reflecting a slight increase from $208.2 million, or $2.31 per diluted share, in the previous year.

The company's performance was impacted by several operational changes, including the acquisition of Greif, Inc.'s containerboard business for $1.8 billion, which was completed in September 2025. This acquisition added significant production capacity and contributed to higher sales volumes. PCA's Packaging segment saw net sales increase by 11.1% to $2.19 billion, driven by higher prices and volumes from the acquired business, although legacy volume decreased slightly. The Paper segment also experienced a modest sales increase of 3.7% to $160 million, supported by higher prices and volumes.

Operationally, PCA reported a decrease in income from operations to $251.3 million, down from $280.3 million in the prior year, largely due to increased costs associated with the Wallula mill restructuring and higher freight expenses. The Packaging segment's operating income fell to $260.3 million from $278.1 million, while the Paper segment's operating income decreased to $33 million from $36 million. The company also reported a significant increase in interest expense, rising to $32.6 million from $12.9 million, primarily due to financing costs related to the Greif acquisition.

Looking ahead, PCA anticipates continued strong demand in the Packaging segment, with expectations for increased corrugated volume and higher prices for containerboard and corrugated products. The company expects to see some seasonal improvements in the second quarter, although it also anticipates higher maintenance outage expenses and a potential increase in costs for freight, fiber, and chemicals. Overall, PCA projects that second-quarter earnings will be lower than the first quarter of 2026, excluding special items, as it navigates these operational challenges and market conditions.