International Paper Q3 Earnings Top Estimates, Down Y/Y on Low Volumes

Core Viewpoint - International Paper Company (IP) reported third-quarter 2024 adjusted earnings of 44 cents per share, exceeding the Zacks Consensus Estimate of 24 cents by 83%, but reflecting a 31% year-over-year decline due to lower volumes in key segments, offset somewhat by higher prices [1][2]. Financial Performance - Net sales for the quarter reached $4.69 billion, a 1.6$4.67 billion [3]. - Cost of sales was reported at $3.34 billion, slightly down from$3.35 billion in the year-ago quarter, while selling and administrative expenses surged 78% to $508 million from$286 million [4]. - Total segment operating profit decreased 33% year-over-year to $237 million, with adjusted operating profit at$233 million, marking a 30% decline [5]. Segment Performance - Industrial Packaging: Sales totaled $3.9 billion, up 3.7$197 million [6]. Corrugating packaging volumes decreased by 6% to 2,195 thousand short tons [7]. - Global Cellulose Fibers: Sales dipped 2% to $710 million, with operating profit increasing 48$40 million despite a 6% decline in volumes [9][10]. Cash and Debt Position - Cash and temporary investments totaled $1.16 billion at the end of Q3, up from$1.11 billion at the end of 2023. Long-term debt decreased to $5.3 billion from$5.46 billion [11][12]. Future Expectations - The company anticipates higher earnings for the Industrial Packaging segment in Q4 due to prior price index increases and lower costs, although volumes may be impacted by two fewer days in the quarter [13]. - Earnings in Global Cellulose Fibers are expected to decline sequentially due to price index declines and planned maintenance outages [14]. Acquisition Update - International Paper is progressing with the acquisition of DS Smith, expected to enhance its corrugated packaging business in Europe and provide significant pre-tax cash synergies by the end of the fourth year post-acquisition [15]. Stock Performance - International Paper's shares have increased by 45.3% over the past year, outperforming the industry growth of 38.7% [16].