International Paper’s Q3 of 2019 finishes with ‘strong operating performance’

International Paper (IP), Memphis, Tennessee, reports that it has experienced “strong operating performance and cost management” in the third quarter of 2019.

“International Paper delivered another quarter of solid earnings and strong cash generation,” says Mark Sutton, chairman and chief executive officer at International Paper. “We continue to demonstrate the strength and resilience of our cash engine and our ability to perform well in a challenging global environment. Looking ahead to the fourth quarter, we will continue to maximize performance by optimizing our full value chain from fiber to the customer.”

Net earnings for the third quarter of 2019 were down when compared with the third quarter of 2018—the company achieved net earnings of $344 million in the third quarter of 2019 compared with $562 million in the third quarter of 2018. However, net earnings were up from the second quarter of 2019, which were at $292 million. Additionally, third-quarter adjusted operating earnings were at $431 million compared with $460 million in the second quarter of 2019 and $641 million in the third quarter of 2018, the company reports in a news release on its third-quarter earnings.

Packaging segment

In IP’s packaging segment, operating profits in the third quarter of 2019 were $510 million (or $535 million excluding special items) compared with $507 million ($515 million excluding special items) in the second quarter of 2019. The company reports that in North America, earnings increased in the third quarter “due to improved demand for boxes and export containerboard, lower planned maintenance outage expenses and lower input costs, primarily for recycled containerboard and wood.” 

However, earnings in this segment were negatively impacted by lower export containerboard prices and seasonally higher manufacturing costs, IP reports in its latest earnings report. 

In Europe, earnings improved driven by higher average margins and favorable manufacturing operations that benefited from continued improved performance at the Madrid, Spain, mill, partially offset by lower volumes, primarily in Morocco. 

Printing papers segment

In IP’s printing papers segment, operating profits in the third quarter of 2019 were $148 million (or $162 million excluding special items) compared with $33 million ($114 million excluding special items) in the second quarter of 2019. Earnings in both periods were negatively affected by the impairment of the company’s India Papers business, IP reports in its latest earnings report. 

In North America, earnings increased due to improved manufacturing operations and lower planned maintenance outage expenses, IP reports. Average sales margins were slightly lower, primarily due to an unfavorable geographic mix. 

In Brazil, earnings increased due to seasonally stronger demand and a favorable geographic mix, partially offset by unfavorable export average sales prices, IP reports in its earnings report. In Europe and Russia, earnings increased due to lower planned maintenance outages in both regions.

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Sale of interest in Indian business

IP has also announced that it completed the sale of its controlling interest in International Paper APPM Ltd., an Indian-based printing paper business, to West Coast Paper Mills Ltd. for about $85 million. IP plans to pursue suitable alternatives to divest its remaining 20 percent ownership interest in APPM, the company reports in a news release on this sale.