) reported second quarter 2013 earnings of $259 million or 57
cents per share compared with $134 million or 31 cents per share
in the year-earlier quarter. The year-over-year increase in
earnings was driven by seasonally stronger volumes and solid
operating performance in most of its segments despite higher
planned maintenance outage costs. The reported earnings exceeded
the Zacks Consensus Estimate by a couple of cents.
Excluding one-time items, operating earnings for the reported
quarter were $288 million or 64 cents per share, versus $232
million or 53 cents per share in the year-ago quarter.
Net sales for the reported quarter were $7.3 billion versus $7.1
billion in the year-ago quarter. The year-over-year
increase in sales was attributable to stellar contribution from
all the operating segments, barring the Distribution business.
However, the quarterly sales missed the Zacks Consensus Estimate
of $7.4 billion.
Sales for this segment increased 9.6% year over year to $3.8
billion. Operating income stood at $474 million in the reported
quarter versus $260 million in the year-ago quarter. The increase
in this segment was driven by higher selling prices for boxes and
containerboard, more box shipments and lower operating costs in
North America; offset partially by a weak demand in Europe.
Sales improved 2.0% year over year to $1.5 billion in the
reported quarter, while operating income declined to $76 million
from $104 million in the prior-year period. The dip in operating
income was driven by higher maintenance outage expenses in North
America and Europe, and the establishment of a reserve ($28
million) to cover potential credit exposure related to the
National Envelope bankruptcy.
Sales increased 9.6% year over year to $855 million. Operating
profit dipped to $51 million from $57 million in the year-ago
quarter. The segment performance was affected by annual outage
costs in both North America and Europe, partially offset by
higher sales volumes and lower manufacturing costs in North
Xpedx (Distribution Business):
Sales for the segment plummeted 6.3% year over year to $1.4
billion. The segment reported break-even results versus an
operating profit of $5 million in the year-ago quarter largely
due to strategic restructuring efforts.
Cash and temporary investments at quarter-end aggregated $1.2
billion. Cash flow from operating activities stood at $1.3
billion, while long-term debt was $9.1 billion.
International Paper recorded Ilim Joint Venture equity losses of
$34 million in the reported quarter versus equity losses of $11
million in first quarter 2013.
International Paper expects to further improve its performance in
the remainder of the year to complement is strong second quarter
results. Although the company did not provide any specific
guidance, we remain impressed by the robust performance of the
company during the quarter that witnessed a healthy top- and
International Paper currently has a Zacks Rank #3 (Hold). Other
stocks that look promising and are worth considering in the
KapStone Paper and Packaging Corp.
), both carrying a Zacks Rank #1 (Strong Buy), and
Resolute Forest Products Inc.
) that retains a Zacks Rank #2 (Buy).
INTL PAPER (IP): Free Stock Analysis Report
KAPSTONE PAPER (KS): Free Stock Analysis
RESOLUTE FOREST (RFP): Free Stock Analysis
ROCK-TENN CO (RKT): Free Stock Analysis
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