Packaging Corp forecasts second-quarter profit below estimates amid tariff-driven demand slowdown

Reuters
04-23
Packaging Corp forecasts second-quarter profit below estimates amid tariff-driven demand slowdown

April 22 (Reuters) - Packaging Corp of America PKG.N forecasts second-quarter profit below Wall Street estimates on Tuesday, as the packaging products maker navigates an uncertain macroeconomic environment amid a tariff-induced demand slowdown.

Shares of the company were down more than 6% to $175 in after-market trading.

It expects second-quarter profit to be $2.41 per share, below analysts' estimate of $2.61 per share, according to data compiled by LSEG.

The company expects rail contract rate increases during the first half of the year to result in higher freight and logistics expenses, putting pressure on its bottom line.

"We anticipate continued ambiguity relative to domestic and foreign tariff actions and their effect on global trade and our demand trends," CEO Mark Kowlzan said.

He added that the company expects domestic prices in its packaging segment to improve with continued implementation of price increases.

Packaging Corp, which supplies paper and packaging products to customers in the food and beverages, paper products and retail trade industries, had benefited from a post-pandemic boost in e-commerce and demand is now recovering after a slowdown.

The company's net sales for the first quarter grew to $2.14 billion from a year ago, beating the analysts' average estimate of $2.11 billion.

Its adjusted profit for the quarter ended March 31 came in at $2.31 per share, compared with expectations of $2.21 per share.

(Reporting by Utkarsh Shetti and Abhinav Parmar in Bengaluru; Editing by Alan Barona)

((UtkarshUmesh.Shetti@thomsonreuters.com))

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