PKG · 10-Q · 2026Q3 · Full report

Operating Margin Drivers

PACKAGING CORP OF AMERICA · 2026-11-05 · Importance 41 · Surprise 48 · From source text

Third-quarter gross profit increased $100 million year over year, driven principally by Packaging price and mix, the Greif contribution, and favorable legacy Packaging volume; higher freight, labor and operating expenses, and fiber costs partially offset those gains. Packaging operating income rose $70 million to $398 million, with $60 million of growth excluding special items; $89 million from higher prices and mix and $41 million from Greif were partly offset by $28 million of freight, $21 million of labor and operating costs, and $16 million of fiber costs. Paper operating income fell $7 million to $29 million, primarily because maintenance outages added $5 million of expense, alongside higher labor, freight, and fixed costs and lower sales volume. For the first nine months, gross profit increased $127 million, while operating income excluding special items increased $76 million, or 8.0%.

Key facts

• Packaging segment EBITDA excluding special items was $578 million in third-quarter 2026, versus $492 million in third-quarter 2025. source
• Packaging segment EBITDA excluding special items was $1,548 million in the first nine months of 2026, versus $1,354 million in the same period of 2025. source
• Third-quarter 2026 net income included $10 million of special-item expense, primarily for facility closures, acquisition and integration costs, a facility fire, and Wallula mill restructuring, compared with $20 million in 2025. source
• Third-quarter 2026 Packaging operating income, excluding special items, increased $60 million; higher prices and mix contributed $89 million, Greif operations $41 million, and favorable sales and production volume $20 million. source
• In third-quarter 2026, PCA’s Packaging operating income was offset by $28 million higher freight, $21 million higher labor and operating costs, $19 million higher fixed and other expenses, $16 million higher fiber costs, and $7 million higher depreciation. source
• Paper segment EBITDA excluding special items was $34 million in third-quarter 2026, versus $40 million in third-quarter 2025. source
• Paper segment EBITDA excluding special items was $110 million in the first nine months of 2026, versus $111 million in the same period of 2025. source
• PCA’s third-quarter 2026 Paper operating income decreased by $7 million, primarily due to $5 million higher maintenance outage expenses, $3 million higher labor and operating costs, $3 million higher freight expenses, $2 million higher fixed and other expenses, and $1 million lower sales volume. source

Impact estimates