Packaging Corp Of America (NYSE:PKG) stock surges 10.11% (As on July 25, 11:36:56 AM UTC-4, Source: Google Finance) after the company posted mixed result for the second quarter of FY 23. In the Packaging segment, total corrugated products shipments and shipments per day were down (9.8%) compared to last year’s second quarter. Shipments per day were up 2.7% versus the first quarter of 2023. Containerboard production was 1,112,000 tons, and containerboard inventory was down (11,000) tons versus the first quarter of 2023 and down (49,000) tons compared to the second quarter of 2022. In the Paper segment, sales volume was down (5,000) tons compared to the first quarter of 2023 and down (19,000) tons versus the second quarter of 2022. Further, the results reflect energy and virgin fiber prices being lower than anticipated, and the logistics and distribution personnel did a great job minimizing the effect of higher freight rates in certain regions as well as optimizing freight routes and transportation modes. During the second quarter, the company had temporarily idled the Wallula, WA mill as the company continued to operate the Packaging segment based on the outlook for demand.

PKG in the second quarter of FY 23 has reported the adjusted earnings per share of $2.31, beating the analysts’ estimates for the adjusted earnings per share of $1.95, according to Zacks Investment Research. The company had reported the adjusted revenue of $1.95 billion in the second quarter of FY 23, missing the analysts’ estimates for revenue of $1.98 billion.

In the Packaging segment, although there is one less shipping day for the corrugated business, the company expects shipments per day to improve versus the second quarter. However, prices will be lower as a result of the previously published domestic containerboard price decreases along with slightly lower export prices. The company expects seasonally stronger volume in the Paper segment from back-to-school shipments, although prices are expected to trend lower based on the recent declines in index prices. Operating and converting costs should trend slightly higher primarily due to higher recycled fiber prices and seasonal energy cost. Scheduled outage expenses will be higher by approximately ($.06) per share driven by the scheduled maintenance planned at the International Falls, MN mill. Finally, the company estimates the depreciation expense and tax rate to be slightly higher as well. Considering these items, the company expects third quarter earnings of $1.88 per share.