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International Paper (IP) Q3 Earnings & Revenues Top Estimates

International Paper CompanyIP delivered third-quarter 2018 adjusted earnings of $1.56 per share exceeding the year-ago quarter figure of $1.01 per share. The bottom line also outpaced the Zacks Consensus Estimate of $1.47.

Including one-time items, earnings for the quarter under review were $1.37 per share compared with 95 cents per share in the year-ago quarter.

Net sales improved to $5,901 million in the reported quarter from $5,517 million in the year-ago quarter, comfortably surpassing the Zacks Consensus Estimate of $5,898 million.

International Paper Company Price, Consensus and EPS Surprise

International Paper Company price-consensus-eps-surprise-chart | International Paper Company Quote

Adjusted cost of sales increased 5% year over year to $3,893 million. Adjusted gross profit in the reported quarter was $2,008 million, up 12% from the prior-year quarter. Selling and administrative expenses dipped 0.5% year over year to $405 million. Adjusted operating earnings of $738 million indicated a year-over-year improvement of 9%.

Segment Performance

Industrial Packaging: Sales from this segment increased to $4,034 million from $3,822 million in the year-ago period. Adjusted operating profit improved to $598 million from $505 million in the year-ago quarter.

Printing Papers: Sales from this segment were $1,102million in the reported quarter, up 6% from $1,039 million in the year-earlier quarter. Adjusted operating profit for the segment was $188 million compared with $135 million in the year-ago quarter.

Global Cellulose Fibers: Sales from this segment were $714 million compared with $654 million in the prior-year quarter. The segment's adjusted operating profit improved 49% to $85 million from the year-ago quarter.

Balance Sheet

As of Sep 30, 2018, cash and temporary investments aggregated $1,026 million compared with $1,018 million as of Dec 31, 2017. Long-term debt was $10,700 million as of Sep 30, 2018 compared with $10,846 million as of Dec 31, 2017.

Cash flow from operating activities for the first nine-month period of fiscal 2018 was $2,405 million compared with $569 million in the prior-year comparable period. Free cash flow for the first nine-month period of fiscal 2018 was $1,119 million compared with $1,238 million in the prior-year comparable period.

Moving Forward

Backed by healthy demand for its products and efforts to offset higher distribution and input costs, the company anticipates delivering a second consecutive year of strong earnings growth in 2018.

International Paper's shares have lost 31.6% over the past year, compared with the industry 's decline of 16.3%.

The company currently carries a Zacks Rank #4 (Sell).

A few better-ranked stocks in the basic materials space are Methanex Corporation MEOH , KMG Chemicals, Inc. KMG and CF Industries Holdings, Inc. CF , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here .

Methanex has expected long-term earnings growth rate of 15%. Its shares have surged 27% in the past year.

KMG Chemicals has expected long-term earnings growth rate of 28.5%. Its shares have rallied 36% in the past year.

CF Industries has expected long-term earnings growth rate of 6%. Its shares have gained 18% in a year.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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