By Trevor Shackelford November 3, 2005 -- International Paper (NYSE: IP) today reported its third quarter results today. Net sales were $6.0 billion, flat from last year. Income for the quarter jumped up to $1.04 billion, or $2.07 per share, up from a net loss of $470 million, or $0.91 per share last year. Results included $278 million, or $0.55 per share, of income from the sale of the company’s interest in Carter Holt Harvey and $603 million, or $1.19 per share, from an agreement with the U.S. Internal Revenue Service. Earnings per share from continued operations (before special items) were $0.33 per share, down 18% from the same period last year. Topics of this Summary Quarter Highlights Segment Performance Guidance Raine Radar Q & A Quarter Highlights Restructuring plan underway – Company realizes $278 million in gains from sale of Carter Holt Harvey The business saw seasonal gains except for a slight decline in industrial packaging Operating profit for the quarter was $489 million, down from $491 million last quarter. The company cited pricing pressures and higher energy costs partially offset by real estate sales and some productivity improvements for the decrease Net corporate expenses were $142 million, up 7% from the second quarter Segment Performance Printing Papers Third quarter operating profits were $132 million, compared to $149 million in the second quarter of 2005. The company saw a decline in uncoated freesheet prices as well as rising input costs. The business also took $17 million in special charges related to equipment shutdowns. Industrial Packaging Second quarter operating profits were $33 million, down from $85 million last quarter. Weak linerboard and box pricing as well as rising input prices contributed to the decline. Consumer Packaging Operating profits for the quarter were $37 million, compared to $41 million last quarter. The company blamed higher input prices. xpedx International Paper’s distribution business, xpedx, reported operating profits of $23 million, up from $18 million last quarter. Increased sales were partially offset by rising energy costs. Forest Products Operating profits were up to $272 million from $191 last quarter due mostly to large increases in timberland sales. Guidance The company provided no specific EPS guidance, but expects earnings from continued operations and before special items to be down somewhat during the next quarter. Sales in the fourth quarter are expected to be approximately flat, but raw material prices are expected to be substantially higher. Raine Radar Although the company saw sharp increases to its bottom line this quarter, so much of that was from the sale of Carter Holt Harvey and the tax settlement that it is difficult to get too excited. The more important metric is earnings from continuing operations (before special items) which was down 18% from last year, and is expected to decline in the fourth quarter. International Paper still has a long way to go. Q & A Mill operations are running “the best they ever had” according to the company. The company removed approximately $500 million in debt from the balance sheet from the sale of Carter Holt Harvey. The pension plan for new employees has been changed to a defined contribution from a defined benefits plan. The company expects to sell forest acreage in smaller chunks over a longer period of time, but is not ruling out the possibility of selling it in much bigger portions. The company is aggressively trying to reduce its sales and administrative prices. International Paper is considering a relatively large share buyback using the proceeds from their restructuring and asset sales.