International Paper Posts Q1 Profit, Misses Revenue
Wednesday, April 29, 2015
Press release from the issuing company
Solid Results Driven by Strong Execution in Key Businesses
MEMPHIS, Tenn. - International Paper (NYSE: IP) today reported first quarter 2015 net earnings attributable to common shareholders of $313 million ($0.74 per share) compared with net earnings of $134 million ($0.32 per share) in the fourth quarter of 2014 and a net loss of $95 million ($0.21 per share) in the first quarter of 2014. First quarter 2015 earnings included a $0.04 per share non-cash foreign exchange charge for the Ilim JV, as described below, compared with a $0.40 per share charge in the fourth quarter of 2014. First quarter 2014 earnings included a pre-tax charge of $495 million associated with the Courtlandmill shutdown. Amounts in all periods include the impact of special items, if any, non-operating pension expense and discontinued operations.
Operating Earnings were $357 million ($0.84 per share) in the first quarter of 2015, compared with $227 million ($0.53 per share) in the fourth quarter of 2014 and $260 million ($0.60 per share) in the first quarter of 2014.
Quarterly net sales were $5.5 billion in the first quarter of 2015 compared with $5.9 billion in the fourth quarter of 2014 and $5.7 billion in the first quarter of 2014.
Business segment operating profits before special items in the first quarter of 2015 were $623 million, compared with $694 million in the fourth quarter of 2014 and $570 million in the first quarter of 2014.
"International Paper delivered another strong quarter through good execution and cost management that resulted in increased margins," said Mark Sutton , Chairman and Chief Executive Officer. "Our North American Packaging businesses, as well as our Ilim joint venture, performed very well. Looking ahead, we will continue to focus on long term value creation by generating strong free cash flow, making sound strategic investments and returning cash to shareholders."
The performance of the Company's business segments is measured quarter to quarter without variations caused by special items, as management focuses on business segment operating profits excluding those items. First quarter 2015 business segment operating profits and business trends compared with the prior quarter are as follows:
Industrial Packaging operating profits in the first quarter of 2015 were $468 million compared with $484 million ($379 million including special items) in the fourth quarter of 2014. In North America, solid operating performance was largely offset by seasonally lower box volume and lower export pricing. Higher planned maintenance outage costs were offset by lower input costs for energy and freight.
Printing Papers operating profits were $109 million in the first quarter of 2015 versus $155 million ($148 million including special items) in the fourth quarter of 2014. Earnings in North America for Paper and Pulp decreased due to slightly lower average sales prices and higher operating costs due to winter weather and other one-time expenses. In addition, earnings in Brazil decreased due to seasonally lower sales volumes, continued weakness in the local economy and a less favorable mix.
Consumer Packaging operating profits were $46 million in the first quarter of 2015 compared with $55 million ($51 million including special items) in the fourth quarter of 2014. In North America, sales volume and input costs were favorable. The business delivered another solid quarter of operations with some impact from winter weather and start-up issues following a planned maintenance outage.
International Paper recorded Ilim joint venture equity earnings of $39 million in the first quarter of 2015 compared with an equity loss of $136 million in the fourth quarter of 2014. With respect to Ilim's U.S. dollar denominated net debt, the Company recognized a non-cash after-tax foreign exchange loss of $18 million in the first quarter of 2015 ($0.04 per share), compared with an after-tax loss of $171 million in the fourth quarter of 2014 ($0.40 per share), due primarily to foreign exchange movement in the U.S. dollar versus the Russian ruble. Business performance improved due to margin expansion associated with lower operating costs.
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