Packaging Corporation Announces 31% Drop in 4Q08 Profit and Adjusts Project Plans

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Researched by Industrial Info Resources (Sugar Land, Texas)--The Packaging Corporation of America (NYSE:PKG) (PCA) (Lake Forest, Illinois) has reported a fourth-quarter 2008 net income of $30.2 million, down 31.4% compared with the same period in 2007. Sales for the quarter dipped nearly 6% to $546 million, compared with $580 million a year ago. Chief Financial Officer Richard West said the company attributes the decreases to the economic downturn, which led to lower sales volumes, record production downtime and increased operating costs. However, he said '08 was the company's second best earnings year after 2007 since it became a standalone company in 1999.

Capital expenditures totaled $35 million in the quarter and $133 million for the full year, West said. As part of our http://www.industrialinfo.com/prodserv/prodserv.jsp?pagerequest=dbproducts North American Project Database, Industrial Info is tracking five active PCA projects worth $112 million. The identified projects include maintenance work at a pulp and linerboard mill in Valdosta, Georgia. This project has been spread out from an eight-day outage to 16 days in order to eliminate overtime and the need for outside contractors, West said. The company plans to utilize most of its own employees. Another altered project is the planned maintenance work at the company's Counce, Tennessee, pulp and paper mill. The maintenance shutdown has been pushed back to April.

PCA is the fifth largest producer of containerboard and corrugated packaging products in the U.S., with four paper mills and 67 corrugated product plants.

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