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Packaging Corporation of America (NYSE:PKG) produces and sells containerboard and corrugated products in the United States. Its corrugated packaging products, include conventional shipping containers used to protect and transport manufactured goods; and multi-color boxes and displays that help to merchandise the packaged product in retail locations.

It is scheduled to report its Q2 2012 results on July 17, 2012, before the market opens. In this article I will recap the historical results of the company, latest EPS estimates vs. surprises, latest developments and closest competitors' development.

Technical Overview


The stock has a market capitalization of $2.77B and is currently trading at $28.24 with a 52-week range of $21.05 - $30.62. The stock performance year to date: 13.87%. It is currently trading above 20, 50 and 200 SMA.

Key Metrics

  • Trailing P/E: 20.40
  • Forward P/E: 12.39
  • Price/Sales: 1.02
  • Price/Book: 2.95
  • PEG Ratio: 2.35
  • Total Debt: 831.34M
  • Annual dividend yield: 3.20%
  • Return on Equity: 14.26%
  • Return on Assets: 10.14%

Recent EPS Actuals vs. Estimates

The company has met or beaten analysts' estimates in the last four quarters. In the last quarter it reported $0.42 EPS, beating analyst estimates of $0.40.

The consensus EPS estimate is $0.45 based on 14 analysts' estimates, up from $0.39 a year ago. Revenue estimates are $689.39M, up from $665.50M a year ago. The median target price by analysts for the stock is $32.00.

Average recommendation: Overweight

Source: Marketwatch

Analyst Upgrades and Downgrades

  • On April 3, 2012, Barclays initiated Equal Weight rating for the company.

Latest Developments

  • On June 27, 2012, Packaging Corp of America announced that the company has completed an underwritten public offering of $400 million of 3.90% senior notes due 2022.
  • On May 11, 2012, Packaging Corp of America announced that its Board has approved a regular quarterly dividend of $0.25 per share on its common stock. The quarterly dividend of $0.25 per share will be paid to shareholders of record as of June 15, 2012 with a payment date of July 13, 2012.
  • On April 18, 2012, Packaging Corp of America announced that for the second quarter of 2012, it expects earnings per share (NYSEARCA:EPS) to be about $0.45. According to I/B/E/S Estimates, analysts are expecting the company to report EPS of $0.46 for the second quarter of 2012.
  • On February 22, 2012, Packaging Corp of America announced that it intends to increase the quarterly cash dividend on its company stock from an annual payout of $0.80 per share to $1.00 per share.
  • On January 24, 2012, Packaging Corp of America announced that for the first quarter of 2012, it expects earnings per share to be about $0.40. According to I/B/E/S Estimates, analysts are expecting the company to report EPS of $0.39 for the first quarter of 2012.

Competitors

Packaging Corp. of America operates in Packaging & Containers industry. The company could be compared with China Shengda Packaging Group Inc. (NASDAQ:CPGI), International Paper Company (NYSE:IP), MOD-PAC Corp. (NASDAQ:MPAC), and Rock-Tenn Co. (NYSE:RKT). Below is the table comparison of the most important ratios between these companies and the industry.

Below is the chart comparison with the stock price changes as a percentage for the selected companies and S&P 500 index for the last one-year period.

(click to enlarge)PKG Chart

PKG data by YCharts

Competitors' Latest Development

  • On July 2, 2012, International Paper Company announced that it has finalized the sale of its Ontario and Oxnard, California containerboard mills to New-Indy Containerboard LLC, along with its New Johnsonville, Tennessee containerboard mill to Hood Container Corporation.
  • On June 26, 2012, Rock-Tenn Company announced that it has closed on its acquisition of the assets of Mid South Packaging LLC, a specialty corrugated packaging manufacturer with operations in Cullman, Alabama, and Olive Branch, Mississippi, from Coridel Capital Partners.
  • On June 14, 2012, Rock-Tenn Company announced that for the third quarter of 2012, it expects earnings in about the same range of second quarter 2012. The Company reported EPS of $0.97 in the second quarter of 2012.
  • On March 16, 2012, Rock-Tenn Company announced that it expects second quarter 2012 earnings of between $0.35 and $.40 per diluted share and adjusted earnings of between $0.85 and $.90 per diluted share.
  • On February 13, 2012, International Paper Company announced that it has completed its acquisition of Temple-Inland Inc. through the merger of its wholly owned subsidiary Metal Acquisition Inc. with and into Temple-Inland.
  • On February 10, 2012, International Paper Company and Temple-Inland Inc announced that they have reached an agreement with the Antitrust Division of the U.S. Department of Justice ("DOJ") with respect to International Paper's acquisition of Temple-Inland.

Sources: Yahoo Finance, Google Finance, Marketwatch, Finviz, Reuters.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: Earnings Preview: Packaging Corporation Of America