During Thursday’s third-quarter earnings call, Packaging Corporation of America executives reported a boost in sales figures despite certain hits to demand. Shipments were up 11% overall compared with last year.

“We're pleased with the cadence of the volume,” said CEO Mark Kowlzan, noting challenged demand in some sectors. The agricultural segment, “especially related to the lettuce issues” from this year’s cyclosporiasis outbreak, is an example. PCA expects volumes to recover in Q4 2026 or Q1 2027. Protein, namely beef, also remains a distressed sector. E-commerce continues to grow, although at a slower pace than in recent years.

Containerboard assets acquired from Greif in September 2025 contributed significantly to Q3 performance. Acquired mills produced 203,000 tons, which is “an exceptional number,” especially considering maintenance outages during the quarter, Kowlzan said. PCA noted it will no longer separate its legacy business from the acquired Greif containerboard business in earnings results.

Higher freight costs continue to affect the balance sheet, along with “significant increases in recycled fiber, purchased power and chemical costs,” Kowlzan said. The company expects those costs will continue to climb.

Pricing

PCA offset multiple quarterly volumes losses and input cost increases with pricing activity, executives said. Containerboard price increases currently are “our supreme focus” and are “driving our results at the moment,” said President Tom Hassfurther.

“Price realization came in ahead of forecast for the third quarter,” Hassfurther said. PCA has “realized substantially” all of the $50 per ton increase from its first round of price hikes this year and about half of the second $50 per ton increase. The remainder of the second increase is expected to come in the fourth quarter.

Realization of the $70 increase that Fastmarkets RISI recognized in September following producers’ third wave of hikes will begin in Q4, with most coming in Q1 2027. PCA had initially announced a $140 per ton increase that round. 

“When we're in price increase mode, we're 100% focused on price increase because those opportunities don't come along that often, and that's incredibly important to our business in the long term,” Hassfurther said.

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PCA has been working for the last year to install a new winder at the Jackson containerboard mill in Alabama, and the startup of that equipment occurred in late September. “I fully see the Jackson mill over the course of the next 1.5 years or so will become a 1-million-ton-a-year mill,” Kowlzan said.

This summer and fall, the company has “seen exceptional performance” from two upgraded mills acquired from Greif: Massillon in Ohio and Riverville in Virginia.

“We took some criticism last year during the first phase of our ownership of Greif because we got heavily engaged in fixing the assets right away,” Kowlzan said. However, the quick action allowed PCA to be “able to get the mills in a very good position to start delivering results,” which executives also discussed during the last earnings call. 

Outlook

The company expects a “pretty strong fourth quarter from a volume standpoint,” Hassfurther said. PCA expects some of the distressed volumes, such as from the ag sector, to recover in Q4 or in Q1 2027. Bookings have grown about 5% in October so far, although billings have lagged.

Executives said the containerboard market is still tight, and they predicted further tightening is likely in Q4 during the seasonal pickup. Containerboard production is projected to decrease in Q4 due to annual maintenance outages at three mills. Corrugated shipments are expected to be in line with last year but higher than Q3. 

PCA expects freight costs to further climb in Q4 due to high diesel prices, so the company is optimizing routes to save money.