Packaging Corporation of America recently reported first quarter 2010 net income of $19 million, or $0.19 per share. Reported results include a $9 million, or $0.09 per share, addition to income from alternative fuel mixture tax credits generated in 2009, and an after-tax charge of $2.5 million, or $0.02 per share, from asset disposals related to the Counce and Valdosta mills major energy projects and the announced closure of the Ackerman, Mississippi sawmill. Net sales for the first quarter were $551 million compared to $512 million in the first quarter of 2009.
Excluding the additional income from 2009 alternative fuel mixture tax credits and the asset disposal and closure charges, earnings were $12 million, or $0.12 per share, versus first quarter 2009 earnings of $26 million, or $0.25 per share. The decrease in earnings per share, compared to last year, was driven by lower containerboard and corrugated products price and mix ($0.26) and higher recycled fiber ($0.06) and pulpwood costs ($0.03). These reductions were partially offset by higher volume ($0.16), lower energy costs ($0.04) and lower chemical costs ($0.02).
Corrugated products shipments per workday were up 12.4% over last year's first quarter, and with one more workday this year, were up 14.2% in total. Outside sales of containerboard were up 40,000 tons, or 48%, over last year. Containerboard production was 569,000 tons after taking about 35,000 tons of downtime related to annual maintenance outages, energy project tie-in work and pulpwood shortages. Containerboard inventories at the end of March were about 12,000 tons below year-end levels.
Paul T. Stecko, Chairman and CEO of PCA, said, "Both our containerboard and corrugated products demand continued to strengthen and were up significantly over last year. Our first quarter box price increase went as planned and was essentially completed by April 1. Extremely wet weather conditions limited our pulpwood supply, which increased wood costs at our Counce mill more than expected and resulted in about 7,000 tons of unplanned downtime at the mill. Better weather conditions in March did allow us to rebuild wood inventories, and wood fiber costs have started to trend down."
