Packaging Corporation of America (PKG) reported net sales of $627 million in the fourth quarter of 2010, up 18% year over year, but was short of the Zacks Consensus Estimate of $635 million.
Packaging Corporation is the fifth largest producer of containerboard and corrugated packaging products in the United States.
Corrugated products shipments were up 3.1% year over year. Outside sales of containerboards were up 8.6%. Containerboard production was 639,000 tons, up 6.4% year over year.
Packaging Corporation ended the year with its containerboard inventories about 25,000 tons, higher than 2009 levels.
Gross margin improved to 23.5% from 16.5% in the year-ago quarter. Net income came in at $54.9 million or 54 cents per share compared with a net income of $58.7 million or 57 cents per share in the year-ago quarter.
Excluding income from bio-fuel tax credits and asset disposal charges, net income came in at $53 million or 52 cents per share compared with a net income of $16 million or 16 cents per share in the year-ago quarter. This was in line with the Zacks Consensus Estimate.
For 2010, Packaging Corporation reported revenues of $2.44 billion, up 13.5% year over year. Net income came in at $205.4 million or $2.00 per share compared with a net income of $265.9 million or $2.60 per share in 2009. Excluding income from bio-fuel tax credits and asset disposal and closure charges, earnings came in at $166 million or $1.62 per share compared with a net income of $96 million or 94 cents per share in 2009.
Going forward, Packaging Corporation stated that some of the mills will undergo annual maintenance outages in the first quarter, which will lower production and increase costs.
Management expects earnings per share of 42 cents in the first quarter of 2011, after considering higher fiber and energy costs associated with cold weather and higher timing related benefit costs and a higher tax rate. This was below the Zacks Consensus Estimate of 47 cents.
Shares of Packaging Corporation were down 4.85% in after-hours trading to close at $27.49 after the company provided disappointing guidance for the first quarter.
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