Packaging Corporation of America (NYSE: PKG) today reported first quarter net income of $90 million, or $0.92 per share. First quarter 2014 net income included after-tax charges for special items of $16 million, or $0.16 per share, including accrual of costs for the settlement of the containerboard antitrust lawsuit ($0.11), Boise integration related costs ($0.03) and non-cash charges related to the DeRidder restructuring ($0.02). Excluding these special items, first quarter 2014 net income was a record $106 million, or $1.08 per share, compared to first quarter 2013 net income of $62 million, or $0.64 per share. Net sales were a record $1.4 billion compared to first quarter 2013 net sales of $755 million.
The $0.44 per share increase in earnings, excluding special items, was driven by the acquisition of Boise ($0.35) and by PCA earnings improvement ($0.09). The PCA earnings improvement was a result of improved price and mix ($0.21) and lower medical, pension and worker’s compensation costs ($0.03), partially offset by higher costs for labor ($0.04), energy ($0.03), freight ($0.02), repairs ($0.02) and other items ($0.04). Higher costs and lower shipments from extreme weather conditions equated to $0.09 per share, of which $0.06 per share was recognized in first quarter earnings, and $0.03 per share was capitalized in inventory and will reduce second quarter earnings.
In PCA’s packaging segment, box shipments were up 31% over the first quarter of last year and up 29% per workday with one additional workday in the first quarter of 2014. Excluding Boise, PCA’s corrugated products shipments were up 3.4% in total, and up 1.8% per workday. With strong internal demand, PCA reduced its outside sales of containerboard by 12,000 tons compared to last year’s first quarter. Containerboard production was 821,000 tons, and PCA ended the quarter with its containerboard inventories down 4,000 tons compared to the first quarter of 2013. Packaging EBITDA in the first quarter of 2014, excluding special items, was $244 million on sales of $1,097 million.