UPDATE 1-International Paper beats Street; consumer packaging weak
Jan 29 (Reuters) - International Paper Co posted better-than-expected quarterly profit on Tuesday as strong sales of corrugated boxes offset weakness in the consumer packaging unit.
IP became the largest North American producer of corrugated packaging with its 2012 buyout of smaller rival Temple-Inland , and profit in that unit jumped 10 percent. Amazon.com Inc is a key IP customer.
But in the consumer packaging unit, profit slumped 38 percent as overseas customers bought more domestically produced boxes for soap, medicine and other consumer items, causing a supply glut in the United States, IP Chief Executive John Faraci said in an interview. Roughly 20 percent of consumer packaging made in the United States is exported.
"We didn't do as well as we could have in the fourth quarter," Faraci said.
For the quarter, the company posted net income of $235 million, or 53 cents per share, compared with $281 million, or 65 cents per share, a year earlier.
Excluding one-time items, profit was 69 cents per share. By that measure, analysts' average forecast was 65 cents, according to Thomson Reuters I/B/E/S.
Net sales rose 10 percent to $7.08 billion, beating the average forecast of $6.97 billion.
"Our success capturing merger benefits from the Temple-Inland acquisition contributed to our fourth-quarter results and International Paper's record cash generation from operations in 2012," Faraci said in a statement.
IP sold its building products unit to Georgia-Pacific LLC last month for $750 million cash, a move designed to sharpen focus on packaging.
Shares of the company closed at $42.12 on Monday on the New York Stock Exchange.