Packaging Corporation of America stock research
FY2023 Q3
Packaging Corporation of America (PKG) Gross Margin — Quarter Ended Sep 30, 2023
Revenue decreased compared to both the previous quarter and the same quarter last year, while cost of revenue remained relatively stable, causing gross profit to fall and the gross margin to narrow. The decline in gross margin reflects the pressure from lower revenue without a proportional reduction in costs.
Gross margin takeaway
Quarter ended Sep 30, 2023 · FY2023 Q3
Revenue decreased compared to both the previous quarter and the same quarter last year, while cost of revenue remained relatively stable, causing gross profit to fall and the gross margin to narrow. The decline in gross margin reflects the pressure from lower revenue without a proportional reduction in costs.
- The strongest observable margin driver is the combination of lower revenue and largely unchanged cost of revenue, which directly compressed the gross margin. This driver is evident in both sequential and year-over-year comparisons.
- Compared to the immediately preceding quarter, revenue and gross profit were lower, with a weaker gross margin. Versus the same quarter one year earlier, all metrics weakened more sharply, as the revenue decline was steeper relative to the cost reduction.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
21.3%
Gross profit
$412.7M
Revenue
$1.9B
Cost of revenue
$1.5B
Quarter-over-quarter change
-1.5 pts
Year-over-year change
-3.1 pts
Quarterly gross margin trend
A four-quarter view of the revenue and direct-cost bridge behind gross margin.
| Period | Revenue | Gross profit | Cost of revenue | Gross margin |
|---|---|---|---|---|
| Mar 31, 2023 | $2.0B | $431.4M | $1.5B | 21.8% |
| Jun 30, 2023 | $2.0B | $444.7M | $1.5B | 22.8% |
| Sep 30, 2023 | $1.9B | $412.7M | $1.5B | 21.3% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Jun 30, 2023
-1.5 pts
Year-over-year change
Sep 30, 2022
-3.1 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable margin driver is the combination of lower revenue and largely unchanged cost of revenue, which directly compressed the gross margin. This driver is evident in both sequential and year-over-year comparisons.
Compared to the immediately preceding quarter, revenue and gross profit were lower, with a weaker gross margin. Versus the same quarter one year earlier, all metrics weakened more sharply, as the revenue decline was steeper relative to the cost reduction.
Monitor whether revenue continues to decline in upcoming quarters, as further drops without cost adjustments could sustain margin compression.