Packaging Corporation of America reported first quarter 2020 net income of $142 million, or $1.49 per share, and net income of $143 million, or $1.50 per share, excluding special items. First quarter net sales were $1.7 billion in 2020 and 2019.
“Excluding special items, the ($.48) per share decrease in first quarter 2020 earnings compared to the first quarter of 2019 was driven primarily by lower prices and mix in our Packaging segment ($.64) and Paper segment ($.05), lower volumes in our Paper segment ($.03), higher annual outage expenses ($.04), higher depreciation expense ($.04), other expenses ($.01), and a higher tax rate ($.01),” the company reported.
In the Packaging segment, total corrugated products shipments with one additional workday were up 5.6% and shipments per day were up 3.9% over last year’s first quarter. Containerboard production was 1,047,000 tons, and containerboard inventory was down 79,000 tons compared to the first quarter of 2019 and down 39,000 tons from the fourth quarter of 2019. In the Paper segment, sales volume was down 14,000 tons compared to the first quarter of 2019 and down 26,000 tons from the fourth quarter of 2019.
“Strong demand in our Packaging segment drove first quarter results,” Mark W. Kowlzan, Chairman and CEO, said. “We had record first quarter volume in our containerboard mills and a new all-time quarterly volume record in our corrugated products plants. The integration rate of our mill’s volume into our plants was 95% and our containerboard inventory was at the lowest level since our acquisition of the Boise packaging business. In our Paper segment, volume and prices were lower as expected, but both were slightly better than anticipated. The scheduled maintenance outages at all mills went very well, which helped us meet the better than expected demand in our Packaging and Paper segments.
“Both the mills and the corrugated products plants did a great job of running their operations safely, and in a cost-effective manner, while facing the unprecedented conditions brought on by the COVID-19 pandemic,” Kowlzan continued. “All facilities operated in adherence to CDC guidelines and followed a strict protocol for workplace operations as well as notification of and response to potential issues. So far, we have not experienced any material disruption in our operations or our supply chain due to the pandemic. I am extremely proud of the effort, responsiveness, and sacrifices displayed by all PCA employees as well as our customers and suppliers.”
