Packaging Corporation of America (PCA) reported higher earnings and sales for the third quarter of 2026, supported by improved packaging prices and contributions from its acquired Greif operations, despite rising freight, fiber and operating costs.
The company posted net income of $262 million, or $2.93 per diluted share, compared with approximately $227 million, or $2.51 per share, a year earlier. Excluding special items, earnings reached $272 million, or $3.04 per share, up from $2.73 per share in the third quarter of 2025.
Adjusted earnings exceeded management's guidance of $2.91 per share, primarily reflecting favorable packaging pricing and product mix and stronger earnings from the acquired Greif operations.
Net sales increased to $2.6 billion from $2.3 billion in the prior-year period.
Packaging drives earnings growth
PCA's Packaging segment generated operating income of $397.8 million, up from $327.5 million a year earlier. Excluding special items, segment operating income rose to $407.7 million from $347.9 million.
The improvement reflected favorable pricing and product mix, higher production volumes and stronger performance from the containerboard operations acquired from Greif.
Excluding special items, the acquired Greif operations contributed $0.13 per share, compared with a loss of $0.11 per share a year earlier. Of the $0.31 year-over-year increase in adjusted earnings per share, $0.24 came from the acquired operations and $0.07 from PCA's legacy business.
Total corrugated products shipments increased 10.6% year over year. However, shipments in PCA's legacy packaging business declined 0.5%, highlighting the contribution of the acquired operations to overall growth.
Containerboard production reached 1.49 million tons during the quarter. Inventories increased by 34,000 tons from the second quarter but remained 29,000 tons below year-earlier levels.
In the Paper segment, operating income declined to $29 million from $35.6 million, while sales volumes fell 2.5% year over year. Favorable pricing partly offset higher maintenance costs and lower volumes.
Rising costs remain a challenge
Higher labor, freight, fiber and other operating expenses partially offset the benefits of stronger packaging pricing, favorable product mix and higher production volumes.
Chairman and CEO Mark Kowlzan noted that the company's mills operated at full capacity during the quarter. He also highlighted production benefits from improvement projects at the Jackson mill and stronger operating performance at the acquired Greif mills.
Third-quarter results included special charges related to facility closures, acquisition and integration expenses, a fire at a corrugated products facility and restructuring activities at the Wallula containerboard mill in Washington.
Higher maintenance costs expected in Q4
Looking ahead, PCA expects relatively solid corrugated products demand in the fourth quarter, alongside continued implementation of previously announced price increases.
However, containerboard production is expected to decline as three mills undergo scheduled maintenance outages. The company also anticipates higher freight costs, rising recycled and wood fiber expenses, and increased chemical and energy costs.
PCA forecasts fourth-quarter earnings of $2.81 per share, excluding special items, compared with $3.04 on the same basis in the third quarter.
The outlook reflects seasonal demand patterns, maintenance-related production impacts and continued cost pressures, despite anticipated improvements in packaging prices.
PCA is North America's third-largest producer of containerboard products and a leading manufacturer of uncoated freesheet paper, operating ten mills and 90 corrugated products plants and related facilities.
