Packaging Corp of America beats profit estimates on improving paper demand
July 24 (Reuters) - Packaging Corporation of America reported a better-than-expected profit on Monday on lower operating costs and healthy demand in its paper segment, with shares of the company rising about 1% in aftermarket trading.
As inflation began to show signs of cooling, the company's operating costs for materials such as chemicals, wood and recycled fiber declined sequentially, improving profit margins.
Despite a notable shift towards service-oriented spending among U.S. consumers, the company saw stable demand in its paper segment, which helped offset lingering weakness in the packaging segment.
"We expect seasonally stronger volume in our paper segment (in the third quarter) from back-to-school shipments," said Chairman and CEO Mark W. Kowlzan.
On an adjusted basis, Packaging Corporation earned a net income of $209 million, or $2.31 per share, in the second quarter ended June 30, beating analysts' estimates of $1.92 per share, according to Refinitiv data.
Revenue at the company's paper segment was $29.1 million, compared to $22.7 million reported last year, driven by better-than-expected demand in the quarter ended June 30. (Reporting by Ananta Agarwal and Anandita Mehrotra in Bengaluru; Editing by Pooja Desai)
