Earnings results often indicate what direction a company will take in the months ahead. With Q2 behind us, let’s have a look at International Paper (NYSE:IP) and its peers.
Industrial packaging companies have built competitive advantages from economies of scale that lead to advantaged purchasing and capital investments that are difficult and expensive to replicate. Recently, eco-friendly packaging and conservation are driving customers preferences and innovation. For example, plastic is not as desirable a material as it once was. Despite being integral to consumer goods ranging from beer to toothpaste to laundry detergent, these companies are still at the whim of the macro, especially consumer health and consumer willingness to spend.
The 9 industrial packaging stocks we track reported a satisfactory Q2. As a group, revenues missed analysts’ consensus estimates by 0.7% while next quarter’s revenue guidance was 2.3% below.
Stocks, especially growth stocks with cash flows further into the future, had a good end of 2023. On the other hand, this year has seen more volatile stock market swings due to mixed inflation data. However, industrial packaging stocks have held steady amidst all this with share prices up 3.8% on average since the latest earnings results.
International Paper (NYSE:IP) Established in 1898, International Paper (NYSE:IP) produces containerboard, pulp, paper, and materials used in packaging and printing applications.
International Paper reported revenues of $4.73 billion, up 1.1% year on year. This print was in line with analysts’ expectations, and overall, it was a very strong quarter for the company with an impressive beat of analysts’ earnings estimates.
"Reflecting on my first 90 days, I am confident in our teams' ability to unlock substantial value at IP," said Andy Silvernail, Chief Executive Officer.
Interestingly, the stock is up 4.3% since reporting and currently trades at $47.94.
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Best Q2: Avery Dennison (NYSE:AVY) Founded as Kum Kleen Products, Avery Dennison (NYSE:AVY) is a manufacturer of adhesive materials, display graphics, and packaging products, serving various industries.
Avery Dennison reported revenues of $2.24 billion, up 6.9% year on year, outperforming analysts’ expectations by 1.9%. The business had a very strong quarter with an impressive beat of analysts’ organic revenue estimates.
Avery Dennison achieved the fastest revenue growth among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 2.7% since reporting. It currently trades at $218.47.
Slowest Q2: Silgan Holdings (NYSE:SLGN) Established in 1987, Silgan Holdings (NYSE:SLGN) is a supplier of rigid packaging for consumer goods products, specializing in metal containers, closures, and plastic packaging.
Silgan Holdings reported revenues of $1.38 billion, down 3.2% year on year, falling short of analysts’ expectations by 3.4%. It was a softer quarter as it posted a miss of analysts’ organic revenue estimates.
Interestingly, the stock is up 3.3% since the results and currently trades at $50.35.
Packaging Corporation of America (NYSE:PKG) Founded in 1959, Packaging Corporation of America (NYSE: PKG) produces containerboard and corrugated packaging products, also offering displays and protective packaging solutions.
Packaging Corporation of America reported revenues of $2.08 billion, up 6.3% year on year. This result topped analysts’ expectations by 2.5%. It was a very strong quarter as it also recorded an impressive beat of analysts’ volume estimates and a decent beat of analysts’ operating margin estimates.
The stock is up 8.1% since reporting and currently trades at $208.42.
Ball (NYSE:BALL) Started with a $200 loan in 1880, Ball (NYSE:BLL) manufactures aluminum packaging for beverages, personal care, and household products as well as aerospace systems and other technologies.
Ball reported revenues of $2.96 billion, down 17% year on year. This number lagged analysts' expectations by 4.5%. Overall, it was a slower quarter as it also recorded a miss of analysts’ organic revenue estimates.
Ball had the weakest performance against analyst estimates and slowest revenue growth among its peers. The stock is up 2.8% since reporting and currently trades at $65.63.
This content was originally published on Stock Story
