美國包裝公司 (Packaging Corporation of America) 2026 年第三季電話會議摘要

重點總覽

• 美國包裝公司 (Packaging Corporation of America) (NYSE: PKG) 公布 2026 年第三季淨銷售額為 26 億美元，高於 2025 年第三季的 23 億美元。調整後每股盈餘 (EPS) 年增 0.31 美元至 3.04 美元。
• 調整後 EBITDA 從 5.03 億美元增至 5.77 億美元。包裝部門調整後 EBITDA 達 5.78 億美元，利潤率從 23.1% 擴大至 23.9%。
• 收購的 Greif 業務貢獻每股盈餘 0.13 美元，相較於一年前剛併購首月的每股虧損 0.11 美元有所改善。併購協同效應年化規模目前已達 4,000 萬至 5,000 萬美元，高於先前設定的 3,000 萬美元目標。
• PCA 已基本實現首波每噸淨漲價 50 美元，以及第二波 50 美元漲幅的大約一半。管理層預計另一波獨立的 70 美元漲價大部分將在 2027 年第一季實現。
• 管理層預測 2026 年第四季調整後 EPS 為 2.81 美元。進一步的價格實現與穩健的瓦楞紙需求，預計將被更沉重的造紙廠停工維修以及更高的貨運、纖維、化學品和能源成本所抵銷。
• 第三季營業現金流為 4.72 億美元，扣除 2.47 億美元的資本支出後，自由現金流為 2.25 億美元。

關鍵財務數據

特殊項目使 2026 年第三季每股盈餘減少 0.11 美元。這主要反映了設施關閉、收購與整合費用、賓州 Palmyra 紙板廠火災以及 Wallula 廠重組費用。

業務與營運表現

包裝業務

包裝造紙廠在本季共生產 148.9 萬噸。既有造紙廠生產 128.6 萬噸，季增 7.7 萬噸，年增 3.1 萬噸。儘管 Riverville 廠進行大規模年度停工維修，收購的造紙廠仍生產了 20.3 萬噸。

包含收購業務在內，瓦楞紙總出貨量年增約 11%。既有業務出貨量下降 0.5%，大致反映出農業需求較為疲軟。管理層表示 9 月預訂情況穩健，10 月預訂量年增略高於 5%，儘管請款作業稍有落後。

國內箱板紙及瓦楞紙產品的價格與產品組合對每股盈餘的貢獻相較 2025 年第三季增加 0.75 美元，相較 2026 年第二季增加 1.11 美元。出口價格與產品組合則相較去年同期增加 0.04 美元，季增 0.03 美元。

與去年同期相比，PCA 向收購的 Greif 業務額外供應了約 4.5 萬噸箱板紙。收購造紙廠的年化產能率也比剛併購時增加了約 7 萬噸。

隨著 Jackson、Counce 及其他造紙廠項目的完工，管理層預期其箱板紙系統年產能將接近 600 萬噸。Jackson 廠的新捲紙機已成功運轉，管理層預計該廠在未來約 18 個月內將提升為年產 100 萬噸的造紙廠。

紙張業務

紙張部門銷售額為 1.63 億美元，高於一年前的 1.61 億美元。銷量較 2026 年第二季增長約 0.9%，但比 2025 年第三季下降 2.5%。

價格與產品組合季增 2.8%，年增 3.8%。EBITDA 利潤率下降主要反映了今年年度維修停工發生在第三季，而非去年的第二季。

管理層業績展望

管理層預計 2026 年第四季調整後 EPS 為 2.81 美元。

隨著季節性改善，瓦楞紙產品需求預計將保持穩健。每日出貨量預估將落在 2025 年第四季左右的水準，儘管出貨天數少了兩天，瓦楞紙總出貨量仍預計將超越第三季。

PCA 預計第二波 50 美元漲價的剩餘部分幾乎全數將在第四季實現。隨後 70 美元的漲幅實現將分布於 2026 年第四季與 2027 年第一季，其中大部分預計落於第一季。

由於包括 DeRidder 在內的三座造紙廠排定進行年度維修停工，箱板紙產量將季減。預計第四季與停工相關的盈餘影響為每股 0.72 美元，使全年總影響達到每股 1.48 美元。

公司目前預測 2026 年資本支出為 8.65 億至 8.90 億美元，調整後折舊與攤銷略高於 7.05 億美元。管理層預期第四季有效稅率將與第三季的 25.8% 幾乎相同。

在紙張部門方面，管理層預計第四季銷量將受季節性影響而下降，價格則略有上漲。

風險與關注焦點

• 回收纖維、木質纖維、貨運、化學品及能源成本預計在第四季上升。管理層假設在基本情況改善前，貨運和回收纖維成本在本季之後仍將保持在高位。
• 三座箱板紙廠的停工將減少第四季產量，並顯著增加維修費用。
• 農業需求受到農作物及天氣問題的影響。管理層預計會有一些復甦，但復甦時間落在 2026 年第四季或 2027 年第一季仍具不確定性。
• 與牛肉相關的包裝需求持續受到牛隻飼養量減少的壓力，而建材需求則繼續面臨利率與監管法規的限制。
• 設備、安裝及承包商成本大幅上升。管理層表示，某些資本項目的成本現在是兩年前的兩倍，而資料中心的興建加劇了對勞力、土地和鋼材的競爭。
• 12 月的需求較難預測，儘管 9 月與 10 月的預訂量較為強勁，管理層仍對第四季的銷量展望保持謹慎。

分析師問答重點

Greif 整合與協同效應：管理層將收購業務的強勁表現歸因於造紙廠可靠度提升、內部箱板紙供應增加、終端市場分配改善以及營運效率提高。協同效應年化規模已增加至 4,000 萬至 5,000 萬美元。

價格與銷量比較：PCA 表示在本輪週期中的首要任務是價格實現與具獲利能力的營收成長。管理層指出，既有業務銷量較弱主要反映特定客戶的農業需求問題，而非廣泛的客戶流失。

第四季至第一季盈餘驅動因素：管理層預期 2027 年第一季將有額外的價格實現、產品組合改善及停工費用降低。這些好處將部分被季節性銷量下滑、冬季營運成本以及約 3% 的正常勞工、福利與服務通膨所抵銷。

產能與資本項目：PCA 預期 Jackson 與 Counce 的項目，連同 Riverville 與 Massillon 的進一步改善，將推動系統箱板紙年產能接近 600 萬噸。三項燃氣輪機項目也在進行中，大部分效益預計於 2028 年顯現；Riverville 的項目仍需取得許可，預計將晚於 Jackson 與 DeRidder 的安裝時程。

資本配置：管理層將於 1 月提供更具體的 2027 年資本支出目標。未來 24 個月的主要支出預計將包括燃氣輪機、Counce 造紙機改進，以及各紙箱廠依客戶需求進行的設備升級。

電話會議完整逐字稿

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完整財報電話會議逐字稿

管理層陳述

Operator

Thank you for joining Packaging Corporation of America's Third Quarter 2026 Earnings Conference Call. Your host today will be Mark Kowlzan, Chairman and Chief Executive Officer of PCA. [Operator Instructions]

I would now like to turn the conference call over to Mr. Kowlzan. Please go ahead when you're ready.

Mark Kowlzan

Thank you, Jamie. Appreciate it very much. Good morning, everyone, and thank you all for participating in Packaging Corporation of America's Third Quarter 2026 Earnings Release Conference Call. Again, I'm Mark Kowlzan, Chairman and CEO of PCA. And with me on the call today is Tom Hassfurther, our President; and Kent Pflederer, our Chief Financial Officer. I'll begin the call as usual with an overview of the third quarter results, and then I'll be turning the call over to Tom and Kent, who will provide further details. And then after that, I'll be wrapping things up, and then we'd be glad to take questions.

Yesterday, we reported third quarter net income of $262 million or $2.93 per share. Excluding special items, third quarter 2026 net income was $272 million or $3.04 per share compared to the third quarter 2025 net income of $247 million or $2.73 per share. Third quarter net sales were $2.6 billion in 2026 and $2.3 billion in 2025. Total company EBITDA for the third quarter, excluding special items, was $577 million in 2026 and $503 million in 2025. Third quarter net income included special items expense of $0.11 per share, primarily for costs and write-offs related to facilities closures, acquisition and integration-related costs, the impact of a fire at our Palmira Pennsylvania sheet feeder and the Wallula restructuring charges. Details of the special items for the third quarter of 2026 and 2025 were included in the schedules that accompanied the earnings press release.

Excluding the special items, our earnings increased by $0.31 per share compared to the third quarter of 2025. The contribution from the acquired Greif business was $0.24 favorable year-over-year, generating $0.13 of earnings this year versus an $0.11 loss last year in the first month of ownership. Legacy earnings improved by $0.07 per share, driven by favorable price and mix and Packaging segment for $0.79 and favorable production and sales volume in the Packaging segment, which includes the impact of additional containerboard supplied to the Greif operations of $0.12. Favorable price and mix in the Paper segment for $0.05 and a lower share count, $0.02. These items were partially offset by higher labor and operating costs, $0.28, and higher freight costs, $0.26, higher corporate and other expenses, $0.13, higher fiber costs, $0.12; higher depreciation and amortization expenses, $0.06 and higher maintenance outage expenses in the Paper segment for $0.04, lower sales volume in the Paper segment for $0.01 and higher interest expense, excluding the Greif acquisition and debt in this per $0.01.

As comparable quarters going forward will include the ownership of the acquired Greif business for the entire period, we will no longer separate the state -- and state the earnings contribution from the acquisition in the future. We exceeded our guidance of $2.91 on the strength of price realization and a higher-than-expected contribution from the acquired Greif business. These items were partially offset by higher labor and operating costs, partially driven by lower-than-forecast corrugated products volume.

Looking at our Packaging business. EBITDA, excluding special items in the third quarter for 2026 of $578 million with sales of $2.4 billion resulted in a margin of 23.9% versus last year's EBITDA of $492 million and sales of $2.1 billion or 23.1% margin. The mills produced 1,489,000 tons during the quarter. The legacy mills produced 1,286,000 tons of containerboard, about 77,000 tons more than the second quarter of 2026 and 31,000 tons more than the third quarter of 2025.

The acquired mills produced 203,000 tons, quite frankly, an exceptional number for a quarter of which Riverville was down for an extensive annual maintenance outage. System-wide, our inventories were up 34,000 tons from the end of the second quarter. And in fact, most certainly, we need that inventory as we move into the fourth quarter. We've been able to catch up with keeping our plants adequately supplied, resume shipping be a most efficient mets possible and we're in a good position to supply our customers in the fourth quarter even with 3 of our containerboard mills down for their annual maintenance outages.

Operational performance was excellent across the board, much improved from the second quarter, and we completed the first annual maintenance outage at the Riverville under our own ownership safely and successfully. From the cost side, in addition to increasing freight, we saw significant increases in recycled fiber, purchase power and chemical costs during the quarter, and we expect these input costs to continue to go up. Our mill production reflects improved output at Jackson even ahead of the completion of the winder project coming online in the fourth quarter as we continue to maximize the performance of the paper machines. We also benefited from continued improvement in reliability out of the acquired Greif mills, but now I'll be turning it over to Tom, who'll provide more details on containerboard sales and corrugated business in general.

Thomas Hassfurther

Thanks, Mark. Domestic containerboard and corrugated products prices and mix were $0.75 per share above the third quarter of 2025 and up $1.11 per share compared to the second quarter of 2026. We have realized substantially all of the first net $50 increase and about half of the second $50 increase. Price realization came in ahead of forecast for the third quarter. We expect to realize almost all of the remainder of the second increase in the fourth quarter. Realization of the $70 increase will be split between Q4 and Q1 and skewed more towards Q1 in terms of timing. Export containerboard prices were $0.04 above last year's third quarter and $0.03 above the second quarter of 2026. Export sales volume of containerboard was 5,000 tons higher than the second quarter of 2026 and 10,000 tons lower than the third quarter of 2025 and remains at a relatively low level. While various factors that we've previously discussed led to lower agriculture end market volume, demand was solid throughout the quarter across the remainder of our customer base. Shipments were up around 11% in total and per day versus last year, with the legacy business down 0.5%, which is about in line with our expectations taking into account the lower ag shipments.

A silver lining is that we got ourselves back on solid footing from an inventory standpoint in time for what looks like a pretty strong fourth quarter from a volume standpoint based upon our September and October bookings. We were also able to save a lot on freight during the quarter by being able to plan and optimize our rents. We remain in a very tight containerboard market, which based upon what we are seeing in our own system appears to be further tightening with fourth quarter seasonal pickup.

As Mark said earlier, we have 3 containerboard mills down for annual maintenance in the fourth quarter, including DeRidder and we will need the mills continuing to perform at the top of their game to keep us properly supplied. The acquired corrugated business meaningfully contributed to our profitability during the quarter, though volumes took a hit from the fire at Palmyra that kept the plant down for most of September. Integration levels continue to improve and legacy PCA mills supplied approximately 45,000 more tons of containerboard into the Greif system during the quarter than it did a year ago. The improved integration together with better operational performance in the mills that Mark mentioned earlier has us well ahead of our synergy targets. All systems work will be completed during the fourth quarter which will further improve our visibility and day-to-day management of the business. This acquisition is working out very well for us in large part due to the quality and performance of our people who have put in a tremendous effort integrating and running the business.

I'll now turn it back to Mark.

Mark Kowlzan

Thanks, Tom. Looking at the Paper segment, EBITDA, excluding special items in the third quarter were $34 million with sales of $163 million or a 20.6% margin compared to the third quarter of 2025 EBITDA of $40 million and sales of $161 million or a 24.9% margin. The differences in EBITDA and margin results from the maintenance outage being in the second quarter last year and the third quarter this year. Sales volume was approximately [ 0.9 tenths of a percent ] above the second quarter of 2026 and approximately 2.5% below the third quarter of 2025. Prices and mix were up 2.8% from the second quarter of 2026 and up 3.8% from the third quarter of 2025. The sales volume, price realization and cost performance contributed to performance above our expectations. I'll now turn it over to Kent.

Kent Pflederer

Thank you, Mark. Cash provided by operations was $472 million and after $247 million of CapEx, free cash flow was $225 million. In addition to CapEx, the primary payments of cash during the quarter included dividend payments of $134 million, cash tax payments of $66 million and net cash interest payments of $29 million. We did not repurchase shares during the quarter. Excluding special items, our effective tax rate during the third quarter was 25.8%. We expect our fourth quarter rate to be nearly identical to the third quarter. We now forecast $865 million to $890 million of CapEx for the year and excluding special items, just above $705 million of depreciation and amortization. These primarily relate to timing of expenditures and assets placed in service and do not reflect changes in our overall plans. Our special items expense for the year-to-date, just to remind you, through Q3 included just under $60 million of depreciation expense and write-offs primarily associated below restructuring.

I'd now like to give you an update on the annual outage schedule and earnings impact for the rest of the year. Our outage expense was $0.28 during the third quarter. Our fourth quarter estimate is $0.72 now totaling $1.48 for the year. The increase of $0.08 from when we last updated you is primarily due to some timing with a couple of cents in 3Q moving into 4Q as well as our decision to substantially increase the scope of maintenance activities at the completed third quarter Riverville outage with more costs now being amortized into the fourth quarter, and to a lesser degree, an increase in the scope of the DeRidder outage will take place next month. I'll now turn it back over to Mark.

Mark Kowlzan

Thanks, Kent. As we move from the third quarter into the fourth quarter, we expect solid corrugated products demand with some seasonal improvement. Shipments per day are expected to be at or around last year's fourth quarter level with 2 fewer shipping days than third quarter, and total corrugated shipments will be higher than the third quarter. Prices for containerboard and corrugated products are expected to improve as we continue to implement earlier price increases, but corrugated products mix will be seasonally weaker with higher e-commerce volumes. Containerboard production will be lower with annual maintenance outages at 3 of our mills and no maintenance outage expenses, including the impact on production volume from the fourth quarter outages will be significantly higher in the fourth quarter. We expect seasonally lower volume and slightly higher prices in the paper segment. We expect freight costs to increase across our business with diesel fuel prices above third quarter levels. We also expect costs for recycled fiber to continue to increase as well as higher wood fiber costs to increase due to winter yields and wood mix and mill mix rather.

Cost for chemicals and energy will increase due to higher chemical prices and higher seasonal energy usage. Considering these items, we expect fourth quarter earnings of $2.81 per share, excluding special items. With that, we'd be happy to entertain any questions, but I must remind you that some of the statements we've made on the call today constitute forward-looking statements. The statements were based on current estimates, expectations and projections of the company and do involve inherent risks and uncertainties, including the direction of the economy and those identified as risk factors in our annual report on Form 10-K on file with the SEC.

Actual results could differ materially from those expressed in the forward-looking statements. And with that, Jamie, I'd like to open the call for questions.

Operator

[Operator Instructions]

Our first question today comes from George Staphos from Bank of America.

分析師問答

George Staphos

I wanted to maybe kick off on volume. You mentioned, Mark, that you expect volume to be paraphrasing even or around the volume trend from last year. Can you talk a little bit about what you're seeing in terms of bookings and billings and how you characterize volume being at or around comparable with also a tight market as you're seeing it?

Mark Kowlzan

Yes. We'll let Tom get into that.

Thomas Hassfurther

George, it's Tom. Bookings were good in September. They're doing very well here in October as well, up a little over 5%. Billings have lagged a little bit, and we expect that will catch up during the fourth quarter. So we're forecasting right now for pretty flat for the fourth quarter. But keep in mind that that's a tough comp we're talking about as well. So it's easy to kind of look at October, November and get some insight. But December is always a bit of a crapshoot. So we're just going to be a little cautious in terms of that forecast. But we're pleased with the cadence of the volume. We've had some struggles, as we mentioned, with the ag business, especially related to the the lettuce issues and some things like that from some of our customers. And we expect some pickup. But again, that will be determined seasonally. Sometimes it picks up in the fourth quarter. Sometimes it tracks into the first quarter. So that's kind of where we are right now. And of course, our mix is going to be a little more concentrated towards e-com in the fourth quarter as well.

George Staphos

Right. Appreciate that. Related to mix and volume perhaps again in the third quarter, given the number that you gave in terms of pricing effect in 3Q was quite strong, you said pricing is ahead of your expectations. Do you think that perhaps maybe you've lost a little bit of volume momentum at all with your pricing or not really? And why do you view that to be the case? Relatedly, when we do just revenue over tons, the mix was a little bit a couple of points lower than we're expecting. Is that Greif effect? Or is that e-commerce effect in the third quarter from what you could see? And then I had one last follow-on.

Thomas Hassfurther

Okay. George, I'm going to remind you of something we talked about for years. When we're in price increased mode, we're 100% focused on price increase. because those opportunities don't come along that often, and that's incredibly important to our business in the long term. Relative to volume, we may lose an item or something like that. But for the most part, these are the same customers we've been dealing with for a long, long time, and they understand the situation we're in and they're in the same -- they're in the exact same situation. When you're using revenue over tons, yes, there's some grace effect in there any question about it. That's a different segment of the market that we weren't in before. So that's going to impact that a little bit. Hopefully, that gives you an answer.

George Staphos

It does. And then lastly, just you mentioned that the CapEx increase and the maintenance spending tweaks were mostly timing. Was there anything in there that was actually required or maybe not anticipated that you had to pull forward in terms of maintenance or CapEx?

Thomas Hassfurther

So George, I'll give it to Mark after this. But in terms of timing, no, the -- we were a little favorable in 3Q to what we put out there last time, but that rolls into the 4Q, that's really kind of timing of amortization of expenses more than anything else. In terms of activities, Mark can maybe comment a little bit more on what we're doing in the 2 mills.

Mark Kowlzan

Yes. I mean, George, we always reserve the right for new discoveries, new opportunities. We we move the capital up and down as we see fit. And some of it's just timing on engineering and deliveries of equipment for installation, but we're pretty encouraged. We just went through that annual shutdown at Riverville and during that week of downtime for most of that week, we had over 1,400, 1,500 contractors and people in the mill site working on that mill. We found some good opportunities, and it will lay out some really nice upside opportunity for that mill over the next few years.

I'm talking about things like some head box, some forming section work, some dryer section work, press section work, things in the back end of the mill. So we're very encouraged by the continuing opportunity that Massillon and Riverville will provide and much in the same way that the Boise mills delivered over the years. So using that term the gift that keeps on giving.

Operator

Our next question comes from Mike Roxland from Truist.

Michael Roxland

First question, it seems like the Greif assets provided most of the upside to 3Q as price cost overall was neutral based on our estimate. First, would you agree with that assessment? And if so, what drove the strong performance at Growth and why was it better than expected?

Mark Kowlzan

Let me talk about Greif and then Tom and Kent can weigh in. we took some criticism last year during the first phase of our ownership of Greif because we got heavily engaged in fixing the assets right away. We had all of our technology organization heavily involved in Massillon and Riverville right from the get-go last September when we closed on September 2. So we took advantage of that and very quickly, we're able to get the mills in a very good position to start delivering results. And we talked about that on the second quarter earnings call that we had accomplished a great deal from a reliability and a performance point of view. And so quite frankly, through the summer months into the fall now, we've seen exceptional performance coming out of both of those mills. And the same thing on the core choice side of the business. They continue to make improvements and so again, that's what we do. That's what PCA does best. We've got an incredible technology and operational group and across the board. And so the results speak to that. Tom, Ken, do you want to weigh in on that?

Thomas Hassfurther

I'll just add, obviously, the integration did help a lot. But I would not put it all on Greif. Some of the other things that we do and we do incredibly well is we can utilize these Greif assets in some different ways than they were able to use it since we have such a large system and we're positioned all across the United States. So there's some end market restructuring that took place as well within our system, which contributed. But that's kind of a cone puts and takes to that. You may move it over to one as opposed to the other. And so that's why I say you can't just hang it all on Greif, but it did provide a lot of opportunities for us. And as Mark mentioned, that's what we do well. We get in there, we take advantage of it and we figure out how to maximize these assets in a way that perhaps wasn't previously available to the previous owner. So that's -- and I think when I talk about end market structure, that's that's not only how we're going to these end markets, but also perhaps how we're -- some of the opportunities that afford themselves in terms of profitability as well. Kent, you got anything else?

Kent Pflederer

No, I'm good. Thanks.

Mark Kowlzan

Anything else, Mike?

Michael Roxland

No, got it. Very helpful. Just one quick one. Just can you help me understand, I mean, Tom, what happened to legacy volumes in 3Q? If you look back at the last couple of quarters, you were outperforming the industry by a few hundred basis points. In 3Q, legacy box volumes declined 0.5%. Obviously, you had the ag issue, but I think the 0.5% was all said and done when we get the industry numbers, you'd probably be in line with the industry. So wondering like what's happened in terms of the outperformance. Is it just a matter of you maybe focusing more on price and maybe less so on volumes.

Thomas Hassfurther

Well, Mike, let's put it this way. Our objective is profitable revenue growth. That can come in a number of different ways. Price is where is where our supreme focus is at the moment. So that's what's driving our results at the moment. And we had -- and as I mentioned before, we did have a couple of segments that were pretty large in that have been a little bit of a drag, but it has nothing to do with losing business. It's just that they had some issues of their own, which cut down some of their demand.

Michael Roxland

Got it, makes sense. And if I can squeeze one more in risk quickly. Kent, you guys guided 4Q to be down around $0.20 sequentially. How should we think about the progression from 4Q to 1Q this year, particularly given the fact that the third price increase is flowing through?

Kent Pflederer

All right, Mike, without putting too fine of a point on this because we really only guide 1 quarter in advance. But I mean, these are the drivers. You will see continued price improvement from 4Q to 1Q as the $70 increase, the remainder of that comes in, okay? Mix also improves a little bit from 4Q to 1Q as well. Outage expense also significantly the P&L it moves in the right direction. Volume goes down just seasonally, 1Q -- 4Q is sort of the peak, 1Q then it comes down a little bit. Mill production up a little bit because we have less outage impact.

On the cost side, you're going to see mill operating costs primarily at 4Q, if not even a little unfavorable just because you're in winter. And then you have the normal inflation that hits the labor benefits services, all that sort of thing, starting at about 3%. We do the best on that though to whittle that down through operational efficiency. So that -- I gave you a lot of factors there, but hopefully, that gives you at least a start based upon our historical performance when you try to model all this.

Operator

Next question comes from Mark Weintraub from Seaport Research Partners.

Mark Weintraub

First, maybe just following up then a little bit on these kind of sequential type analysis since we've been going there. As we think about 4Q to 3Q, I think at a conference, you had, sort of, talked about something less than $0.45 having been experienced last year might be what you would see this year. Now is the difference now the, kind of, or $0.20 reduction you're projecting from 3Q to 4Q. Is that a function of the September pricing? Would that be the kind of the main reason why that would have changed?

Mark Kowlzan

Oversimplified yes, but I'll give you a little more color on this, okay? We saw a fairly large sequential increase from 2Q to 3Q in price. Given the mix and given the timing of roll in, we won't be nearly as favorable 3Q to 4Q, but the price favorability should be enough to offset the additional costs that we're taking on in the outages. It should be -- that's about even, okay? We then have higher operating costs. And if you look across the portfolio of costs in our mills and operations, you're going to have higher recycled, higher freight, higher seasonal okay, offset a little bit by favorable in the corrugated operations just to a better cost absorption.

So all those factors into place, yes, we're about 20 to 25 down from 3Q to 4Q. But the big help there is realization of the 70 increase, the beginning of realizing that. Hope that helps, Mark.

Mark Weintraub

Yes, it does. And then, obviously, you've been doing a terrific job offsetting a very difficult cost environment. on the pricing side. I mean, your long-term track record has been a lot about company-specific value creation as well. And you've alluded to several things that should help '27 versus '26 on that score already. Maybe if you could sort of give us like a laundry list, Jackson, counts, the box plant in Ohio, further gains from the Greif improvements, et cetera. I mean, what are the things that big picture we should be thinking about? And lastly, I think the energy projects are more 2028, but maybe update us on your thoughts there.

Mark Kowlzan

Let me start. Yes, the energy projects, you'll see the benefit more into the 2028 period. Again, we're -- we're in construction mode right now at Jackson and breaking ground at DeRidder. We're waiting on permits for the gas turbine installation at the Riverville mill. So that's pending. But you just hit it on the head. We continue with our capitalization program Tom commented on the successful start-up of the new box plant in Ohio. That's we had it...

Thomas Hassfurther

We had an incredibly good start-up in our new Newark plant, which also allowed us to announce the closure of Middletown a little bit earlier than what we probably would have otherwise. We've got further installations going in there as we speak, and we're continuing the same cadence basically with putting in other equipment and upgrading other equipment and box plants all across the United States. So we have to be incredibly well equipped to continue to deliver a very -- at the levels that we do for our customers and perform the quality that we have and those sorts of things.

I might mention in addition, the work we continue to do on our proprietary grades of paper is allowing us a lot of opportunity, and we'll continue to do that going forward. And that has a lot to do with our capital expenditures as well. So Mark, we've -- we're in -- we continue to do what we do incredibly well, and we've been doing on a regular basis for the last decade.

Mark Kowlzan

Another example, Mark, is the new winder at the Jackson mill that had been under construction for over a year. And we got that started up at the end of September and really the last couple of weeks now, but it came up incredibly well, and that wind is running as planned. And so Jackson's got a duplicate wind, you're now running 10,000 feet a minute if we need it, which the plan would be to put more fiber over that machine. And -- but I fully see the Jackson mill over the course of the next 1.5 years or so will become a 1 million-ton a year mill and we've been talking about that for the last 6 or 7 years, that was the direction we were taking the mill, and that's where we're going.

Counce is another example. We've got the second phase of the work going on on the #2 machine at Counce to upgrade that capability. So we'll be seeing further benefits -- significant benefits out of the Counce #2 machine, which will be productivity, quality cost. But again, this is -- we've got approximately 200 people in the corporate technology organization dealing with these matters 7 days a week. And those of us at the corporate level, this is what we do and either we're doing and working on operational matters or the group is working on customer base marketing and sales matters. And that's what we focus on, and that's what we do well.

Mark Weintraub

Actually, one really quick one, if I could then. Maintenance outage expense, it's high this year. Is that just because things are more expensive? Or were you just taking more outages this year than normal. So if we think about next year, should we just assume similar to this year or not necessarily?

Mark Kowlzan

Good question. It's both. We undertook obviously with the Matalan mill and the Riverville mill, we undertook more activity, but also, we're just doing some things at the legacy mills that we want to get done, and we always take care of these assets and in terms of -- we may have older mills, but if I took you into these mills, you'd think they were new mills. And so -- but also, it's the cost of capital the equipment cost today are significantly higher than they were just a few years ago. And so whether you're buying a pump or a motor or a major -- a new head box. The costs have gone up dramatically just in the last year or so.

And then, again, the labor cost to install, if you're having contractors come in, that labor cost is up significantly. And so that's really -- it's the amount of work we're doing and taking advantage of the time and the capability to do it. and the pure capital cost of these components and the labor cost to do it. So I would mention we are in a really good position. For the last 10 years, we have gotten ahead of the curve, so to speak, on recapitalizing our box plant assets. Our mills are in great shape. And so everything we're doing is more on autopilot opportunity, taking care of the customer base, growing with the customers. And Tom, why don't you add a little bit more?

Thomas Hassfurther

Well, just to follow up on that, Mark. I think what's -- we've mentioned this numerous times, but this cost of capital has gone up 2, 3x in a lot of cases, both at the mills and at the box plants. And so it's imperative in order to be able to continue to grow with our customers and be able to take care of our customers and all those other sorts of things to be able to earn your cost of capital. And that's part of struggle that we have every day to make sure that we're able to do that. And to Mark's point, also is -- as I mentioned, we've been at this for a long time. So a lot of those improvements that we put in place were prior to some of these exorbitant increases that we're now encountering. But those are definitely considerations going forward. And all these projects that we've got going on also God only knows we need all these tons too. They're sold already. appreciate detail.

Operator

Our next question comes from Anojja Shah from UBS.

Anojja Shah

I wanted to ask about synergies. I think you said they're running ahead of plan. Any way to put a finer point on that, like how much it contributed in 3Q? And also, are you still expecting $30 million for this year or next year? Or do you think you can end up doing a little better than that?

Kent Pflederer

No. We're doing a little better than that. We're on a run rate now between $40 million and $50 million. And we called out 45,000 tons of increased integration from PCA into the acquired. That's a big piece of it. There's other integration benefits. And then there's just the reliability, cost performance and whatnot at the acquired Greif mills, 70 run rate -- 70,000 more tons now than what it was doing at the time of the acquisition. So really, those buckets are the factors and the synergies at this point.

Anojja Shah

Right. Okay. And then switching over to end markets. Have you seen any pickup? So I know the FDA declares the cycle for an outbreak done. Have you seen any improvement in your shipments, recognizing that it's probably a bit of a seasonal market. And then also, can you talk about what you're seeing in your other end markets, industrial and consumer.

Thomas Hassfurther

No, I'll take a stab at this. I've mentioned ag numerous times. We do see some recovery in ag. The question will be is how much of that occurs in the fourth quarter and how much rolls over into the first quarter and does weather cooperate. That's been also a little bit of a drag. Protein markets have been, especially on the beef side -- have been down now for quite some time. Everybody has heard about the level of the herds and how long it's going to take to get those herds back up and get that volume back up. So that's going to still take some time. But the other [indiscernible] e-com is still not growing at the same rate. It had grown for a long time, but still is a growing market and still doing quite well.

Outside of that, the other markets are kind of where they are. I mean we'd like building products to pick up some and things like that. That has to do with government regulations and a whole bunch of other things and interest rates. So there's lots of puts and takes, and we're in so many different markets, and we've got thousands and thousands of customers in these various markets. So it's hard to predict any single 1 ag has stuck out more than others just because of what's gone on weather-wise and the [indiscernible] and all the other things that have occurred.

Operator

Our next question comes from Phil Ng from Jefferies.

Philip Ng

Congrats on a strong quarter. I think if I heard you correctly, you guys are doing a little more extensive work in the fourth quarter with its DeRidder, I think Massillon as well. My question is, does that unlock potentially more capacity, more debottlenecking. I think when you guys announced idling the [indiscernible] and [indiscernible] some of the other mills, I had a number in mind roughly 6 million tons of capacity once it's all said and done, but you guys always find new things to do. So can you kind of help us think through your capacity to produce just because as you kind of pointed out, market is very tight.

Mark Kowlzan

Yes. I mean if you think about our expected run rate for 2026 is probably going to be 5,757,000 tons. So I would think we're on track, and I've been talking about this for the last year that we'll get to be a 6 million-ton system with this work that we're doing. And so it's basically we get through these outages next year at Counce and some of the work we've got going on at Jackson. We certainly have that capability that depending on the grade mix you're producing, we're bumping up against that 6 million-ton capability. but this is ongoing. This is what we do. We continue to stretch the capability.

We see the opportunities. That's why I mentioned earlier on the call, the annual shutdown that just occurred at Riverville now, it unlock these opportunities before our eyes in terms of some capital input will greatly improve the productivity and performance of the Riverville mill. And so that's going to be another piece of the containerboard supply over the next couple of years as we get that equipment installed and that mill stretched out.

Massillon mill is a good example. Massillon mills performing incredibly efficiently compared to a year ago. And so these are the little things that we do that make Massillon such an important mill to us. You've got the new box plant down in Newark, it's -- I believe it's like 80 miles from the Massillon mill. So it's basically shuttle truck distance away the [indiscernible] box plant is probably 40 miles away from Massillon. So Massillon being a very efficient mill just within the first year of ownership, presents an incredible opportunity. But we'll continue to stretch out a long answer to your question, we're definitely at that 6 million ton bumping that capacity into -- with the projects we got coming on over the next 6 months to a year.

Philip Ng

Got you. And any early read on CapEx next year and big projects in the horizon? I mean, you spent a lot of time that most people would be happy with anything that you have up your sleeve that [indiscernible] talk about.

Mark Kowlzan

We'll give you a better target in the January call, as we always do. But I mentioned some of the bigger projects we know really, the big spend over the next 24 months will come from the gas turbine installations. We've got 3 gas turbines going in. And we got to finish up the Counce #2 machine improvement work. That was a fairly sizable amount of work. And then the rest of it is just the whole host of opportunities that present themselves across the board in the box plants. We're always -- it's going to be the one-off equipment. It's the [indiscernible], the BOPs, the various rotary die cutters, new corrugators to continue to grow with our customer base.

Thomas Hassfurther

That's all customer-driven.

Mark Kowlzan

And that's the beauty of that, that we invest with the customer. And so I think without giving you a number, if you think about the cadence of our capital for the last couple of years, we're going to take advantage of those type of opportunities. We're generating significant cash flows. So I think the question will come as it has always been, what are we doing with all the excess cash. So I'll leave it at that.

Philip Ng

Okay. Super. Perhaps a question for Kent. Kent, you were kind enough to give some color sequentially from Q4 to Q1. Outside of the labor and benefits piece, which steps up every year around 1, are you starting to see your major input costs level off here, just your operations, freight and stuff like that? And then any color on the September increase, how much of that is flowing through in Q4 versus 1Q? Is it like a 20-80 split?

Kent Pflederer

Okay. So I'll take your last one. I think it's probably a little more into Q4 than what you said, but I don't want to throw a number, but it's better than 20-80 in terms of Q4 versus Q1. All right. So on input costs, freight recycled. Right now, at least looking past 4Q, we got to assume it stays at elevated levels, okay, until we see some sort of breakthrough and the drivers on those -- right now, I'm assuming at fairly high levels similar to what we're forecasting for Q4.

Philip Ng

Okay. That's helpful. I mean margin should improve nicely with cost level off.

Operator

Our next question comes from Anthony Pettinari from Citi.

Anthony Pettinari

Just following up on the energy projects. I think at the beginning of the year, you talked about the gas turbine projects taking maybe 2.5 years. And I was wondering if I got that right. And if kind of in the current operating environment, which is pretty tight, is that -- are you sort of on track for that? Are there possible to get forward or just.

Mark Kowlzan

Because there are 3 installations at 3 different mills, they're moving in 3 different paces. We're currently -- we're actually in installation mode at the Jackson mill. That's moving along very quickly. And part of that was we were able to get the permits very quickly and to move on that through the summertime period. And so DeRidder is somewhat behind that. And then Virginia with the Riverville mill, we're going through a permitting process, and that's taking a little extra time. Part of it is we're just comprehensively looking at the entire mill footprint with the mill opportunities in terms of productivity on the paper machine side, the pulp mill side and comprehensively looking at what that mill will become over the next few years. So there's a little bit of extra time in the permitting process. So that would be kind of like a late 2028 into the -- truly just the 2 years out to see that would come on at best. That's why it's really a multiyear phased project.

Anthony Pettinari

Got it. That's very helpful. And then apologies if this was asked earlier, but in terms of the most recent box price hike, when we think about the implementation and the time line, for that hike. Is -- should we think about that as being basically the same as the first and the second hikes this year? Or is there anything about kind of towards the end of the year or the competitive environment? Just how would you compare the implementation timeline for the third one versus the first 2 just based on where we are close to the end of the year.

Thomas Hassfurther

Anthony, this is Tom. Our timeline is pretty much the same on each of these. And I gave you the -- in the commentary. We got -- the first is in. We still are realizing some of the -- some of the second 50 in the fourth, we'll realize a little bit of the 70 in the fourth and the majority will come in Q1 of next year. So the cadence on these are pretty much the same. Now you may be asking the question because it's not very -- it's not every day that we get 3 back to back to backs. So it's -- but that's how the cadence is working for us right now. And it's all based on the normal procedures that we go through with our customers.

Operator

Our next question comes from Hillary Cacanando from Deutsche Bank Securities.

Hillary Cacanando

Just a quick clarification question on the $70 increase. You said you expect obviously more in the first quarter than the fourth quarter. But are you expecting the full $70 increase to be realized by the first quarter? Or do you see -- do you think that, that could extend beyond the first quarter into the second.

Thomas Hassfurther

Hillary, this is Tom. In the normal cadence that I just talked about, most of the -- great majority of the realization will all be in the first quarter next year.

Hillary Cacanando

Okay. Got it. That's helpful. And then just with recycled fiber costs continuing to increase, has anything changed in how you're optimizing the mix between recycled and virgin fiber?

Mark Kowlzan

No. Again, we take advantage. It's a mill-specific opportunity, mill by mill, location by location. You've got transportation considerations on OCC. And then again, just what the pulp mill itself is designed to do. And so you balance out your fiber needs with OCC in general, DLK. But in the conditions we're under in terms of with the tight market need for containerboard, we've got everything pretty well maxed out. Virgin Craft productivity, OCC plant productivity. So it's basically utilizing everything we can take advantage of right now.

Operator

Sir. We have a follow-up question from George Staphos from Bank of America.

George Staphos

I'll make it quick. Mark, can you talk a little bit about what kind of lead times you're seeing on equipment? You talked a little bit about turbines and obviously, you already had purchased those but opportunistically so. But if we think about converting equipment versus equipment you might need at the mill. What are your lead times right now? And how would those compare versus what you're doing about elsewhere perhaps? And then when we think about Greif, the synergies, which have now moved up the turbine project and then the mill realignment optimization program we announced last year into this year, maybe it was the beginning of this year. I know it depends on where you start the clock. But I think we've talked in the past, do you think you've added from all of that $0.5 billion to when you think about those 3 or 4 larger buckets in the quarter.

Mark Kowlzan

George, I'll knock off your last one. The answer is we're pretty darn close to that. There is some inflation effects to that. But yes, we've talked about that before publicly in response to your prior questions, but yes, that's still a pretty good number there.

George Staphos

Just marking to market there. Go ahead.

Mark Kowlzan

And then on some of the lead times, it depends on what you're ordering. if you're ordering some very complex pieces of unit operations, the lead times can be longer. In some ways, there's some opportunities that have taken place. Some of the equipment suppliers actually don't have as big a backlog as they had a few years ago. So the lead times have shortened up, but more than the lead times, it's the cost. Whether 2 years ago, it took 4 months to get something delivered and now you get it delivered in 10 months. It doesn't matter if the cost is up 60% from what it was 1.5 years ago. And so it's -- it's the absolute cost to acquire the piece of equipment and then the installation labor that goes into it and the associated installation factors that have increased in many cases, have doubled the cost of capital projects just in the last 2 years.

Thomas Hassfurther

And I'd add that if we're building at all, I mean, you're now competing with data centers for land and for steel and all these other things that are going on. So those construction costs are just going through the roof as well.

Mark Kowlzan

We're definitely seeing -- if you think about the contractor availability is a good example. And what Tom just said about data centers. With any specific region, if you are in the building in trades and you have an opportunity to work at a data center, quite frankly, if you look at the pay scales and locations and quite frankly, just the magnitude of the buildout, it's put an incredible demand nationwide on a lot of the building and trade. So again, that's another factor that we deal with. We're fortunate. We have a good group of contractors that we've aligned ourselves with. We -- again, we have our own and incredibly talented maintenance organization that we use across the board. We call that the Traveling Team and in conjunction with the technology group. So we're able to overcome a lot of that, but still -- Again, I wouldn't -- the delivery times, it's one factor, but it's the absolute cost of the equipment that's really a factor.

George Staphos

Mark, I understand, but if I was ordering a new paper machine, I was converting something, I'm not getting into the business, but let's say it was. Am I looking at 2 years on that? If I was buying a new [indiscernible] glories buying an eval, not you, but me, Am I a year before I get that equipment? That's just what I'm getting at.

Mark Kowlzan

Yes. I mean it just depends on the equipment you're buying, the vendor you're buying it from, what country it's coming from. Again, the permitting issues, the contractors availability to install it. But I can tell you, it's investing in this business is not for the faint of heart anymore. So it's -- the game has changed significantly.

Jamie, any more questions?

Operator

Mr. Cosan, I see that there are no more questions at this time. Do you have any closing comments?

Mark Kowlzan

Yes, I'd like to thank everybody for joining us today. And as usual, we appreciate the back-and-forth question-and-answer period, and look forward to talking to everybody in January. With that, have a great rest of the year and a great holiday period. Thank you.

Operator

And with that, we'll wrap up today's conference call and presentation. We do thank you for joining. You may now disconnect your lines.