International Paper Tops Forecasts on Product Favorable Pricing
International Paper posted a better-than-expected first-quarter profit as pricing for its products improved.
The largest U.S. paper and forest products company reported net income of $434 million, or 97 cents a share, compared with a year-earlier loss of $1.24 billion, or $2.54 a share.
Excluding one-time items, earnings from continuing operations were 45 cents a share. Analysts on average were expecting 40 cents, according to Reuters Estimates.
Sales slipped to $5.22 billion from $5.53 billion, slightly below analysts' estimates of $5.23 billion. International Paper attributed the decline mainly due to lower sales of forest land.
The company said earnings benefited mainly from strong results from its printing papers and industrial packaging segments.
"We expect somewhat higher earnings from continuing operations in the second quarter, with seasonally stronger volumes and improvements in average price realizations," Chief Executive John Faraci said in a statement.
"We expect that input costs will remain high and also expect to have slightly higher maintenance outage expense in the second quarter," he added.
Operating profit at the printing papers business more than doubled to $231 million from $105 million.
At the industrial packaging unit, operating profit jumped to $103 million from $29 million.
But operating profit fell 47% to $100 million from $190 million at the forest products segment, which supplies timber for construction and other purposes.
The Memphis, Tenn.-based company also warned that the segment's operating profit could fall slightly in the second quarter from the first quarter due to the timing of certain land sales.
The stock has risen more than 6% in the last three months, outpacing the Standard & Poor's Paper and Forest Products Index, which has remained almost flat.