Packaging Corporation of America Reports $2.6 Billion in Q3 Sales as Earnings Rise; Packaging Segment Drives Growth

Packaging Corporation of America (NYSE: PKG) reported higher net sales and net income for the third quarter of 2026, supported by stronger packaging-segment operating results, favorable pricing and product mix, and contributions from its acquired Greif operations.

The company reported net sales of $2.60 billion for the quarter ended September 30, 2026, compared with $2.31 billion in the same period last year. Net income increased to $262.3 million from $226.9 million, while reported diluted earnings per share rose to $2.93 from $2.51.

Excluding special items, diluted earnings per share reached $3.04, an increase from $2.73 a year earlier. Adjusted earnings exceeded the company's third-quarter guidance by $0.13 per share, primarily reflecting favorable price and product mix in the Packaging segment and favorable earnings from acquired Greif operations. These benefits were partially offset by higher labor and operating costs and unfavorable corrugated-products sales volume.

The results reflect continued strength in PCA's packaging business, although its Paper segment reported lower operating income and corporate expenses increased.

Key Financial Highlights

• Net sales: $2.60 billion, up approximately 12.5% year over year.

• Net income: $262.3 million, compared with $226.9 million in Q3 2025.

• Reported diluted EPS: $2.93, compared with $2.51.

• Diluted EPS excluding special items: $3.04, compared with $2.73.

• Income from operations: $385.3 million, compared with $324.5 million.

• Operating income excluding special items: $397.8 million, compared with $350.8 million.

• EBITDA excluding special items: $577.2 million, compared with $503.4 million.

• Nine-month net sales: $7.46 billion, compared with $6.63 billion in 2025.

• Nine-month net income: $625.3 million, compared with $672.3 million.

Figures are based on PCA's reported results. EBITDA and earnings excluding special items are non-GAAP measures.

Quarterly Revenue and Earnings Increase

PCA's third-quarter net sales rose by approximately $288.3 million from the prior-year period, reflecting a combination of packaging business performance and the contribution from acquired operations.

Gross profit increased to $603.9 million from $504.3 million. However, cost of sales rose to approximately $2.00 billion from $1.81 billion, while selling, general and administrative expenses increased to $182.7 million from $154.3 million.

Income from operations increased to $385.3 million from $324.5 million. After accounting for net interest expense of $32.3 million, non-operating pension income of $1.2 million and income tax expense of $91.9 million, PCA reported net income of $262.3 million.

The company recorded special items affecting reported earnings, including facilities-closure and other costs, a charge associated with a corrugated-products facility fire, and acquisition-related and integration expenses.

Reported results therefore reflect both the operating performance of the business and costs associated with specific events and activities. PCA's adjusted figures exclude designated special items under its non-GAAP methodology.

Packaging Segment Leads Operating Performance

PCA's Packaging segment delivered the strongest contribution to quarterly operating income, benefiting from pricing and mix improvements and the contribution of acquired Greif operations.

Third-quarter Packaging segment operating income increased to $397.8 million from $327.5 million in the prior-year quarter. Excluding special items, operating income rose to $407.7 million from $347.9 million.

EBITDA excluding special items increased to $577.7 million from $491.8 million.

The company's results indicate that favorable price and mix helped support profitability despite higher labor and operating expenses and unfavorable corrugated-products sales volume.

For the first nine months of 2026, Packaging segment operating income reached $971.2 million, compared with $952.0 million in the corresponding period of 2025. Excluding special items, operating income rose to $1.05 billion from $953.6 million.

Nine-month Packaging EBITDA excluding special items reached approximately $1.55 billion, compared with $1.35 billion a year earlier.

These results underline the importance of the Packaging segment to PCA's overall operating performance, particularly as the company integrates acquired operations and manages cost pressures across its manufacturing network.

Paper Segment Profit Declines

PCA's Paper segment reported third-quarter operating income of $29.0 million, compared with $35.6 million in the same quarter of 2025.

Unlike the Packaging segment, Paper segment operating income was unchanged by the special-item adjustments presented in the company's results.

EBITDA excluding special items declined to $33.6 million from $40.1 million.

For the first nine months of 2026, Paper segment operating income totaled $96.2 million, compared with $96.9 million in the prior-year period. Nine-month EBITDA excluding special items was $110.4 million, compared with $110.7 million.

The segment's lower quarterly operating income demonstrates that PCA's performance was not uniform across its businesses. Packaging generated stronger operating earnings, while Paper remained comparatively stable over the nine-month period but recorded a weaker third quarter.

Corporate Expenses and Special Items

Corporate and Other reported an operating loss of $41.5 million in the third quarter, compared with a loss of $38.6 million in the prior-year quarter.

Excluding special items, the operating loss was $38.9 million, compared with $32.7 million in Q3 2025.

For the first nine months, Corporate and Other reported an operating loss of $139.7 million, compared with $110.4 million in the prior-year period. Excluding special items, the loss was $124.6 million, compared with $102.9 million.

PCA's reported special items included:

• Facilities-closure and other costs.

• Costs associated with a corrugated-products facility fire.

• Expenses associated with acquisition and integration activities.

• Wallula mill restructuring costs, particularly relevant to the nine-month results.

For the first nine months of 2026, PCA recorded $60.0 million in Wallula mill restructuring costs. The company's reported EBITDA excluding special items also reflects the adjustments specified in its reconciliation schedules.

These expenses are important when assessing the difference between reported and adjusted operating performance. Investors should consider both the underlying business results and the costs associated with restructuring, integration and other events.

Nine-Month Results: Revenue Growth, Lower Net Income

For the nine months ended September 30, 2026, PCA reported net sales of $7.46 billion, up from $6.63 billion in the corresponding 2025 period.

Despite the increase in revenue, net income declined to $625.3 million from $672.3 million. Diluted earnings per share, as presented in the company's earnings reconciliation, were $6.98 for the first nine months of 2026, compared with $7.45 a year earlier.

Income from operations declined to $927.7 million from $938.5 million. Excluding special items, operating income increased to $1.02 billion from $947.6 million.

EBITDA excluding special items reached approximately $1.55 billion for the nine-month period, compared with $1.38 billion in the prior-year period under the company's stated reconciliation methodology.

Interest Expense Rises

PCA reported net interest expense of $32.3 million for the third quarter, compared with $19.3 million in Q3 2025.

For the first nine months, net interest expense increased to $98.3 million from $45.2 million.

The increase is a material factor in the company's reported financial performance. Although operating income excluding special items improved over the nine-month period, higher interest expense contributed to pressure on earnings after operating income.

PCA also reported non-operating pension income of $1.2 million in the third quarter and $3.5 million during the first nine months of 2026.

The available earnings figures establish the change in interest expense but do not, by themselves, provide a complete breakdown of the underlying causes.

Management's Earnings Guidance and Operating Priorities

PCA's reported third-quarter adjusted diluted EPS of $3.04 exceeded its guidance of $2.91 by $0.13 per share.

The company attributed the outperformance primarily to favorable price and mix in the Packaging segment and favorable earnings from acquired Greif operations. These benefits were partially offset by higher labor and operating costs and unfavorable corrugated-products sales volume.

This guidance comparison is an important indicator of the quarter's execution against management expectations. However, it should not be interpreted as evidence that all operating challenges have been resolved.

The reported results show that Packaging segment profitability improved, while Paper segment income declined and Corporate and Other losses increased. Continued performance will therefore depend on the sustainability of packaging pricing and mix, the integration of acquired operations and the company's ability to manage operating costs.

Full-year outlook: The figures reviewed for this report establish PCA's third-quarter results and its comparison against third-quarter EPS guidance. They do not establish a new full-year earnings forecast, so no additional full-year target is presented here.

Manufacturing Footprint and Industry Position

Packaging Corporation of America is a major North American packaging producer, with operations spanning containerboard, corrugated packaging products and uncoated freesheet paper.

The company has described itself as the third-largest producer of containerboard products and a leading producer of uncoated freesheet paper in North America. Its manufacturing footprint includes 10 paper mills and 90 corrugated-products plants and related facilities.

This integrated operating structure connects paper production with the manufacture of corrugated packaging products, placing the company's Packaging and Paper segments within the wider paper and packaging supply chain.

The third-quarter results suggest that packaging operations remain the principal earnings contributor. At the same time, the performance of the Paper segment, manufacturing costs, facility-related expenses and the integration of acquired operations remain relevant to the company's consolidated outlook.

Earnings Conference Call

PCA scheduled a conference call to discuss its third-quarter 2026 results for Thursday, October 22, 2026, at 9:00 a.m. Eastern Time, led by Mark Kowlzan.

The company announced that the results would be released after market close on October 21, 2026. A replay of the conference call was scheduled to be available from October 22 through November 5, 2026.

Investors can access company information through the official investor relations website:

https://ir.packagingcorp.com/

The company also provides corporate information at https://www.packagingcorp.com/.

Company Background

Packaging Corporation of America (NYSE: PKG) produces containerboard, corrugated packaging products and uncoated freesheet paper. Its operations serve industrial, commercial and consumer markets through an integrated paper and packaging manufacturing network.

The company's Packaging segment is central to its earnings profile, while its Paper segment provides additional exposure to paper products and related markets.

Editorial Takeaway

PCA's third-quarter 2026 results show revenue growth and higher net income, alongside stronger operating income and adjusted EBITDA. The Packaging segment was the principal driver of improved operating performance, supported by favorable pricing, product mix and contributions from acquired Greif operations.

The picture is more mixed when viewed across the entire business. Paper segment operating income declined during the quarter, corporate losses increased, interest expense rose and corrugated-products sales volume remained a headwind.

For investors and industry observers, the central question is whether PCA can sustain its packaging profitability gains while controlling manufacturing costs, integrating acquired operations and managing its broader paper and packaging business.

The quarter provides evidence of stronger adjusted operating performance, but future results will depend on how effectively the company converts revenue growth into durable earnings and cash generation.

Disclosure: This article is an independently written financial news report based on Packaging Corporation of America's third-quarter 2026 earnings release. It is not an official company-issued press release, does not represent an exclusive interview with PCA, and does not constitute investment advice.

Financial reporting note: Reported earnings are presented under generally accepted accounting principles (GAAP). Operating income excluding special items and EBITDA excluding special items are non-GAAP measures defined by PCA. Readers should consult the company's earnings release for its complete reconciliations, definitions and explanations of these measures.