What’s in Cards for Packaging Corp’s (PKG) fourth quarter earnings?


Packing Company of America PKG is expected to report fourth quarter 2021 results after the January 26 closing bell.

Q3 results

In the last reported quarter, Packaging Corp’s earnings and revenue exceeded Zacks’ respective consensus estimate. The top and bottom have increased year by year. The company has a surprise on earnings for the last four quarters of 13.01% on average.

Fourth quarter estimates

Zacks’ consensus estimate for Packaging Corp’s fourth-quarter earnings per share is currently pegged at $2.08, suggesting growth of 56.4% from year-ago quarter levels. Zacks’ consensus estimate for total sales is pegged at $1.92 billion, indicating an 11.8% increase from year-ago quarter levels.

Factors at play

Packaging products are essential for the distribution of food, beverage and pharmaceutical products. Consequently, high demand for meat, fruits and vegetables, processed foods, beverages, drugs and other consumer products in response to the coronavirus pandemic is expected to have contributed to the performance of the Packaging segment in October. to December. Strong demand for containerboard and corrugated products is likely to have boosted the segment. Zacks’ consensus estimate for the segment’s quarterly revenue is pegged at $1,788 million, calling for a 16% year-over-year jump. The company’s operating profit consensus mark is pegged at $302 million, indicating 42% year-over-year growth. Segment volume will be lower due to three fewer shipping days and the planned shutdown at the DeRidder plant.

The e-commerce boom has boosted demand for the company’s boxes. Packaging Corp’s containerboard mills set an all-time quarterly sales volume record and its box mills set new records for total shipments of corrugated products in the third quarter of 2021. The company is expected to also have taken advantage of this momentum in the fourth quarter.

The pandemic has affected paper consumption in schools, offices and businesses, putting a strain on the demand for paper. Additionally, the paper segment was adversely affected by weak demand for paper owing to the growing preference for electronic data transmission, electronic readers and electronic document storage alternatives. These are likely to be reflected in the company’s results for the quarter to be published. Zacks Consensus Estimate for Paper segment revenue is pegged at $144 million for the end-December quarter, suggesting a 7.7% year-over-year decline. Zacks’ consensus estimate for segment operating profit is set at $9.40 million, calling for an increase from the $2.5 million in the year-ago quarter.

High material costs, rising energy and lumber costs, coupled with rising planned outage costs, may have weighed on the company’s margins in the fourth quarter.

Packaging Corporation of America Price and surprise EPS

Packaging Corporation of America price-eps-surprise | Quote from Packaging Corporation of America

What our model says

Our proven model does not conclusively predict an earnings beat for Packaging Corp this season. The combination of a positive Earnings ESP and a Zacks rank of #1 (Strong Buy), 2 (Buy), or 3 (Hold), increases the odds of beating Earnings. But it is not the case here.

You can discover the best stocks to buy or sell before they’re flagged with our earnings ESP filter.

ESP Earnings: The earnings PSE for Packaging Corp is -0.72%.

Zack’s Ranking: Packaging Corp currently carries a Zacks rank of 3. You can see the full list of today’s Zacks #1 Rank stocks here.

Price performance

In one year, shares of Packaging Corp fell 0.9% against growth of 14.9% for the sector.

Zacks Investment ResearchImage source: Zacks Investment Research

Stocks are poised to beat earnings estimates

Here are a few Industrials stocks you can consider as our model shows they have the right mix of elements to post a pace of earnings in their upcoming releases:

WW Grainger, Inc. GWW currently has an earnings ESP of +2.29% and a Zacks ranking of 2. Zacks’ consensus estimate for earnings for the fourth quarter of 2021 has risen 0.2% over the past 30 days to $5.25 per share, suggesting year-over-year growth of 43.4%.

Zacks’ consensus estimate for quarterly revenue is pegged at $3.2 billion, indicating an 11.3% improvement over year-ago quarter levels. Grainger has a long-term earnings growth rate of 13%.

AGCO Company AGCO currently has an earnings ESP of +25% and a Zacks ranking of 2. The Zacks consensus estimate for Q4 2021 earnings is currently pegged at $1.72 per share, suggesting growth of 11 .7% compared to the count of the quarter of the previous year.

Zacks’ consensus estimate for quarterly revenue is pegged at $3.04 billion, pointing to 11.9% year-over-year growth. AGCO has a surprise on earnings for the last four quarters of 47.5% on average. It shows long-term earnings growth of 19.1%.

Terex Company TEX currently has an ESP on Earnings of +1.36% and a #3 Zacks Rank. Zacks’ consensus estimate for fourth-quarter 2021 earnings has been flat for the past 30 days and is currently pegged at 55 cents per share. This indicates a growth of 162% compared to the count of the quarter of the previous year.

Zacks’ consensus estimate for quarterly revenue is pegged at $948.5 million, indicating a 20.5% year-over-year improvement. Terex has a four-quarter earnings surprise of 80.4% on average.

Stay on top of upcoming earnings announcements with Zacks Earnings Calendar.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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