We Think You Can Look Beyond Packaging Corporation of America's (NYSE:PKG) Lackluster Earnings

March 02, 2021
  •  Updated
August 07, 2022
NYSE:PKG
Source: Shutterstock

The market for Packaging Corporation of America's (NYSE:PKG) shares didn't move much after it posted weak earnings recently. We think that the softer headline numbers might be getting counterbalanced by some positive underlying factors.

Check out our latest analysis for Packaging Corporation of America

earnings-and-revenue-history
NYSE:PKG Earnings and Revenue History March 3rd 2021

How Do Unusual Items Influence Profit?

For anyone who wants to understand Packaging Corporation of America's profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit was reduced by US$122m due to unusual items. While deductions due to unusual items are disappointing in the first instance, there is a silver lining. We looked at thousands of listed companies and found that unusual items are very often one-off in nature. And, after all, that's exactly what the accounting terminology implies. If Packaging Corporation of America doesn't see those unusual expenses repeat, then all else being equal we'd expect its profit to increase over the coming year.

That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates.

Our Take On Packaging Corporation of America's Profit Performance

Unusual items (expenses) detracted from Packaging Corporation of America's earnings over the last year, but we might see an improvement next year. Because of this, we think Packaging Corporation of America's earnings potential is at least as good as it seems, and maybe even better! On the other hand, its EPS actually shrunk in the last twelve months. Of course, we've only just scratched the surface when it comes to analysing its earnings; one could also consider margins, forecast growth, and return on investment, among other factors. In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. You'd be interested to know, that we found 2 warning signs for Packaging Corporation of America and you'll want to know about these.

Today we've zoomed in on a single data point to better understand the nature of Packaging Corporation of America's profit. But there is always more to discover if you are capable of focussing your mind on minutiae. Some people consider a high return on equity to be a good sign of a quality business. So you may wish to see this free collection of companies boasting high return on equity, or this list of stocks that insiders are buying.

If you decide to trade Packaging Corporation of America, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account. Promoted


Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.

Make Confident Investment Decisions

Simply Wall St's Editorial Team provides unbiased, factual reporting on global stocks using in-depth fundamental analysis.
Find out more about our editorial guidelines and team.