Packaging Corporation of America Navigates Turbulent Market, Posts Strong Earnings Despite Challenges
Despite facing a tumultuous market, Packaging Corporation of America (PCA) has managed to post impressive earnings in its second quarter 2026 results. In a recent conference call, PCA's Chairman and CEO, Mark Kowlzan, outlined the company's financial performance for the period, highlighting both the successes and challenges faced by the organization.
According to Kowlzan, PCA reported net income of $192 million, or $2.15 per share, for the second quarter 2026. Excluding special items, the company's earnings were $210 million, or $2.35 per share, compared to $224 million, or $2.48 per share, in the same period last year.
The company's net sales for the quarter came in at $2.5 billion, up from $2.2 billion in 2025. Total EBITDA, excluding special items, was $486 million in 2026 and $451 million in 2025. The results indicate that PCA's earnings decreased by $0.13 per share compared to the second quarter of 2025, driven primarily by higher freight costs, corporate and other expenses, lower price and mix in the packaging business, and higher labor and operating costs.
However, the company managed to partially offset these decreases through higher production and sales volume in both its packaging and paper businesses. Additionally, Greif's earnings contribution exceeded expectations, driven by strong volumes in the corrugated business and improved operating performance in the mills. The acquisition of Greif also provided a $0.04 benefit to depreciation expense due to measurement period adjustments.
The company's packaging business saw EBITDA excluding special items come in at $489 million with sales of $2.3 billion, resulting in a margin of 21.1% versus last year's 22.6%. PCA produced 1,415,000 tons of containerboard during the quarter, with its legacy mills producing 1,209,000 tons, about even with the first quarter of 2026 and 14,000 tons more than the second quarter of 2025.
The company's operational performance was affected by production interruptions resulting from utility power outages across the mill system. However, PCA was able to work through these issues and achieve its production goals, given that it had completed outages at five of its packaging mills during the quarter.
Looking ahead, Kowlzan emphasized the need for PCA to execute and realize the benefits of its gas turbine projects, which will reduce or eliminate its reliance on the grid at three key facilities. This would provide a much-needed boost to the company's operational resilience in an increasingly tight market.
