Wallula Mill Stoppage Impacts PCA's Paper Segment Volume

SEATTLE (Scrap Monster): Lake Forest, Illinois-headquartered Packaging Corporation of America (PCA) announced third quarter 2019 results. The company reported net income of $180 million or $1.89 per share during the quarter. The net income excluding special items totalled $182 million or $1.92 per share. The company reported third quarter net sales of $1.8 billion.

The packaging segment income for the three months ended September 30, 2019 totalled $235.1 million, as against $284.4 million in Q3 2018. The third quarter paper segment income surged higher from $32.3 million to $48.1 million year-on-year.

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The corrugated products shipments by the company climbed higher marginally by 1.9%. The containerboard production totalled 1.070 million tons. The box plants reported record shipments. The containerboard inventory recorded decline by 30,000 tons from the prior quarter. Meantime, the Paper segment volumes recorded year-on-year decline, driven by discontinuation of paper business at its Wallula Mill. However, volumes of office paper and converting grades edged higher slightly upon comparison with third quarter 2018.

Mark W. Kowlzan, Chairman and CEO, PCA foresees slightly lower prices in Packaging segment and reduced shipment volumes for corrugated products. The containerboard sales volume is likely to remain lower in the fourth quarter of 2019. The paper segment volumes are also expected to be seasonally lower. Taking into account, the high energy costs on account of colder weather and higher maintenance outage costs, the company is likely to report lower earnings of $1.70 per share in Q4 this year.