Packaging Corp. shares tumble as 4Q outlook dims

WASHINGTON - Packaging Corp. of America's stock plummeted Friday, a day after the company disclosed demand for containerboard and other box products to be "significantly lower" than previously expected.

Shares of the Lake Forest, Ill.-based company's stock fell $1.39, or 11 percent, to $11.75 in midday trading Friday. Over the last 52-week period, the company's stock has traded between $11.22 and $29.97.

The company told investors Thursday it expects its fourth-quarter earnings to be below its previous guidance of 35 cents per share due to weaker demand and higher-than-anticipated downtime. Analysts polled by Thomson Reuters, on average, anticipate earnings of 34 cents per share.

As a result of weaker demand, the company also announced plans to take 90,000 tons of production downtime in the fourth quarter.

Wall Street analysts responded by cutting their earnings forecast as well.

Goldman Sachs analyst Richard Skidmore slashed his earnings prediction to 28 cents per share from 35 cents per share. He also lowered his full-year earnings estimate to $1.34 from $1.40 per share.

While Mark Weintraub of Buckingham Research Group trimmed his fourth-quarter earnings estimate to 26 cents per share from 35 cents per share.

Separately, the board Thursday declared a regular quarterly dividend of 30 cent per share. The dividend is payable Jan. 15 to shareholders on record as of Dec. 15.

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