International Paper Reports Second Quarter 2016 Earnings
(USA, July 28, 2016) International Paper (IP) today reported second quarter 2016 net earnings attributable to International Paper of $40 million ($0.10 per share) compared with net earnings of $334 million ($0.81 per share) in the first quarter of 2016 and net earnings of $227 million ($0.54 per share) in the second quarter of 2015. Net earnings in all periods include the impact of special items, if any, non-operating pension expense and discontinued operations.
Operating Earnings in the second quarter of 2016 totaled $379 million ($0.92 per share) compared with $330 million ($0.80 per share) in the first quarter of 2016 and $409 million ($0.97 per share) in the second quarter of 2015.
Quarterly net sales were $5.3 billion in the second quarter of 2016 compared with $5.1 billion in the first quarter of 2016 and $5.7 billion in the second quarter of 2015. The year-over-year revenue decline was primarily due to the sale of the IP-Sun joint venture and the sale of the Carolina® Coated Bristols business.
Business segment operating profits in the second quarter of 2016 were $628 million, compared with $497 million in the first quarter of 2016 and $676 million in the second quarter of 2015.
Cash from operations was $605 million in the second quarter of 2016. Free cash flow was $527 million for the quarter.
“International Paper continues to perform very well and we are taking deliberate and meaningful strategic steps to make the company stronger. Our second quarter results were driven by strong execution across our operations around the globe,” said Mark Sutton, Chairman and Chief Executive Officer. “As we move into the second half of the year, we remain focused on running our businesses well and closing the Weyerhaeuser acquisition, which will strengthen our position in the growing global fluff pulp markets and create additional value for our shareholders.”
SEGMENT INFORMATION
The performance of the Company’s business segments is measured quarter to quarter without variations caused by special items, as management focuses on business segment operating profits excluding those items. Second quarter 2016 business segment operating profits and business trends compared with the prior quarter are as follows:
Industrial Packaging operating profits in the second quarter of 2016 were $487 million ($459 million including special items) compared with $433 million ($396 million including special items) in the first quarter of 2016. In North America, earnings increased $58 million driven by improved operations and higher box shipments due to seasonally stronger market demand and one more shipping day. This was partly offset by modestly lower average sales prices for North America boxes and export containerboard.
Printing Papers operating profits were $101 million ($96 million including special items) in the second quarter of 2016 versus $85 million in the first quarter of 2016. Earnings in North America were mixed, as the papers business declined primarily due to increased planned maintenance outages. However, pulp improved due to lower conversion and outage costs associated with the Riegelwood mill conversion, partially offset by a less favorable product mix and lower pulp prices. In Brazil, earnings were essentially flat quarter over quarter, as higher planned maintenance outage costs offset higher export sales volumes and improved domestic prices. Earnings in Europe were impacted by higher planned maintenance outage costs.
Consumer Packaging operating profits were $73 million in the second quarter of 2016 compared with $25 million ($16 million including special items) in the first quarter of 2016. The earnings increase was primarily due to no planned maintenance outages in North America, good operational performance, as well as lower overall manufacturing costs. Foodservice business earnings increased $7 million, primarily driven by seasonally higher sales volume and cost improvements.
International Paper recorded Ilim joint venture equity earnings of $46 million in the second quarter of 2016 compared with $62 million in the first quarter of 2016. Operational EBITDA for Ilim was lower than in the first quarter due to higher planned maintenance outages and input costs, partially offset by higher sales volumes. Primarily due to Ilim’s U.S. dollar denominated net debt, the Company recognized a non-cash after-tax foreign exchange gain of $6 million in the second quarter of 2016 ($0.01 per share), compared with an after-tax gain of $11 million in the first quarter of 2016 ($0.03 per share).
To learn more, please visit: www.internationalpaper.com (Source: International Paper)
