PKG

Packaging Corp of America is the third-largest North American containerboard producer, operating ten mills and 91 corrugated plants. FY2025 revenue rose 7.2% to $8.99B, driven by higher packaging and paper prices, better mix, lower fiber costs, and the September 2025 acquisition of Greif's containerboard business for $1.8B in cash. Reported net income dipped 3.9% to $774M ($8.58 diluted EPS), but that was depressed by $114M of special items; excluding those, management reports $888M ($9.84 per share), up from $814M, with legacy PCA earnings improving $0.96/share against a ($0.16) first-quarter drag from the newly-acquired Greif mills. Packaging segment EBITDA excluding special items grew to $1,830M from $1,598M.

The business throws off strong cash — operating cash flow jumped 30.8% to $1.56B — and earns a healthy 16.8% ROE. The flip side is heavy reinvestment: capex rose 23.8% to $829M and D&A climbed to $653M, both consistent with a capital-intensive mill operator now integrating Greif. The acquisition was debt-funded: long-term debt rose 60.3% to $3.97B and cash fell 22.8% to $529M, though management cites $1,241M of total liquidity including the revolver. Equity of $4.60B against $3.97B of long-term debt is still manageable for a stable cash generator.