International Paper industrial packaging profits up in Q2 of 2019

International Paper (IP), Memphis, Tennessee, has released its second-quarter 2019 financial results. IP’s second-quarter net earnings declined from the first quarter of 2019 and from the same period in 2018, according to a news release from International Paper. Second-quarter net earnings attributable to IP were $292 million compared with $424 million in the first quarter of 2019 and $405 million in the second quarter of 2018.

The company achieved second-quarter adjusted operating earnings of $460 million compared with $447 million in the first quarter of 2019 and $498 million in the second quarter of 2018. In addition, IP achieved second-quarter equity earnings of $80 million compared with $70 million in the second quarter of 2018. 

“International Paper delivered solid earnings and generated strong cash from operations in the second quarter,” says Mark Sutton, chairman and chief executive officer at International Paper. “We continued to operate well and manage costs across our businesses. We also returned nearly $430 million to shareholders through dividends and share repurchases. Looking ahead to the third quarter, we will leverage the strength and flexibility of International Paper to maximize performance as we manage through a challenging environment.”

IP’s industrial packaging segment operating profits in the second quarter of 2019 were $507 million (or $515 million excluding special items) compared with about $404 million in the first quarter of 2019. In North America, earnings increased due to seasonally high demand for boxes, strong manufacturing performance and favorable input costs, IP reports in a news release. However, earnings were negatively impacted by lower export containerboard prices and volumes. Additionally, planned maintenance outage expenses increased, with 80 percent of the company’s annual planned outages completed. 

In Europe, the company’s industrial packaging segment earnings increased. IP reports that the increase was driven by higher average margins and favorable manufacturing operations, which benefited from improved performance at IP’s Madrid mill, partially offset by seasonally lower volumes primarily in Morocco. 

The company’s printing papers segment operating profits in the second quarter were $33 million (or $114 million excluding special items) compared with about $143 million in the first quarter of 2019. IP reports that this segment’s earnings were negatively impacted by the net impairment of its India Papers business. Earlier this summer, the company had entered into an agreement with West Coast Paper Mills Ltd. to sell its controlling interest in International Paper APPM Ltd. IP had owned about 75 percent of the outstanding shares of that business. 

In North America, IP’s printing papers segment increased planned outages were partially offset by improved sales prices and improved manufacturing operations, the company reports in the news release. In Brazil, earnings increased because of seasonally stronger demand, partially offset by unfavorable input costs. In Europe and Russia, earnings decreased primarily because of planned maintenance outages in both Europe and Russia.