International Paper Releases Second Quarter Earnings

International Paper reported second quarter 2014 net earnings attributable to common shareholders totaling $161 million ($0.37 per share) compared with a net loss of $95 million ($0.21 per share) in the first quarter of 2014, which included a pre-tax charge of $495 million associated with the Courtland mill shutdown, and net earnings of $259 million ($0.57 per share) in the second quarter of 2013.

Operating Earnings were $409 million ($0.95 per share) in the second quarter of 2014, compared with $265 million ($0.61 per share) in the first quarter of 2014 and $288 million ($0.64 per share) in the second quarter of 2013.

Quarterly net sales were $7.2 billion compared with $7.0 billion in the first quarter of 2014 and $7.3 billion in the second quarter of 2013.

Business segment operating profits before special items in the second quarter of 2014 were $697 million, compared with $577 million in the first quarter of 2014.

“International Paper delivered strong results with increased volume and expanded margins in the face of relatively high input costs,” said John Faraci, chairman and CEO. “As we move into the second half of the year, the company is well positioned to improve earnings and free cash flow generation for the balance of 2014, despite a challenging global environment.”

Industrial Packaging operating profits in the second quarter of 2014 were $534 million ($537 million including special items) compared with $467 million ($453 million including special items) in the first quarter of 2014. North America’s improved performance (partly reflecting recovery from first quarter weather-related issues and costs) was driven by increased packaging volume, lower operating costs and lower input costs. Results were partly offset by increased planned maintenance outage costs. In Brazil, earnings improved due to higher packaging volume and box prices.

Printing Papers operating profits were $118 million ($69 million including special items) in the second quarter of 2014 versus $85 million (a loss of $410 million including special items) in the first quarter of 2014. The earnings increase in North America was primarily driven by better pricing and mix, lower closure costs at the Courtland Mill, improved operating costs (including the recovery from the weather-related costs in the first quarter), and lower input costs. This was partially offset by higher maintenance outage spending and lower volume. Operating profits in Brazil improved primarily due to increased sales prices and mix. In Europe, higher planned maintenance outage costs negatively impacted earnings.

Consumer Packaging operating profits were $34 million ($33 million including special items) in the second quarter of 2014 compared with $18 million ($17 million including special items) in the first quarter of 2014. Price improvement and favorable operations (including the recovery from the unfavorable weather conditions in the first quarter) were key factors in the improved results.

xpedx, the company’s North American distribution business, reported operating profits of $11 million ($12 million including special items) in the second quarter of 2014 compared with $7 million ($5 million including special items) in the first quarter of 2014. The xpedx spin-off was completed July 1, 2014. xpedx merged with Unisource Worldwide, Inc., and the combined companies are now Veritiv Corporation.