Packaging Corporation of America (NYSE: PKG) today reported first quarter net income of $18 million, or $0.18 per share, which included a non-cash, after-tax charge of $23 million, or $0.24 per share, from an amendment to its 2009 federal income tax return related to biofuel tax credits. Excluding this charge, adjusted net income was a first quarter record $41 million, or $0.42 per share, compared to first quarter 2011 adjusted net income of $39 million, or $0.39 per share, which excludes a $2 million, or $0.02 per share, asset disposal charge.
The increase in adjusted net income was driven by higher containerboard and corrugated products volume ($0.09) and lower costs for energy ($0.04) and recycled fiber ($0.02). These items were partially offset by lower containerboard export prices ($0.03) and higher costs for depreciation ($0.03), transportation ($0.02), labor ($0.02), and interest expense ($0.02).
Net sales were a first quarter record $671 million, up 7% compared to first quarter 2011 net sales of $630 million.
Corrugated products shipments were up 8.3% compared to last year’s first quarter, and outside sales of containerboard were essentially equal to last year. Containerboard production was 640,000 tons, up 38,000 tons over the first quarter of 2011. PCA ended the quarter with its containerboard inventories about 11,000 tons above year-end 2011 levels.
Commenting on reported results, Mark W. Kowlzan, Chief Executive Officer of PCA, said, “Our business was very strong throughout the quarter with record corrugated products shipments and stable pricing for both domestic containerboard and corrugated products. Export containerboard prices were lower than last year, but did stabilize early in the first quarter. Our mills ran extremely well, allowing us to meet strong demand and build inventory required to offset lower production from mill maintenance outages in the second quarter. Except for transportation and normal labor and benefit cost increases, inflationary cost pressures were less than last year.”