International Paper Company (IP - Free Report) reported third-quarter 2020 adjusted earnings of 71 cents per share, which outpaced the Zacks Consensus Estimate of 48 cents. However, the bottom line declined 35% year over year from $1.09 reported in the prior year quarter. The downside was due to disappointing performances across all segments.
Including one-time items, the company posted earnings per share of 52 cents during the the third quarter of 2020 compared with the year-ago quarter’s 87 cents.
Net sales declined 8% to $5,123 million in the third quarter from the year-ago quarter’s $5,568 million. However, the top line surpassed the Zacks Consensus Estimate of $5,031 million.
Segment Performance
Industrial Packaging: Sales in this segment decreased 1% year over year to $3,768 million in the third quarter from the year-earlier quarter’s $3,820 million. Operating profit fell 12% year over year to $469 million.
Global Cellulose Fibers: This segment’s sales were $564 million in the third quarter, down 10% from the prior-year quarter. The segment incurred an operating loss of $59 million, against the year-ago quarter’s operating profit of $4 million.
Printing Papers: Sales of this segment came in at $743 million, down 31% from the $1,071 million reported in the year-earlier quarter. The segment’s operating profit plunged 61% year over year to $63 million in third-quarter 2020.
Financial Position
Cash and temporary investments aggregated $678 million as of Sep 30, 2020 compared with $511 million as of Dec 31, 2019. As of Sep 30, 2020, long-term debt was $8.5 billion compared with $9.6 billion as of Dec 31, 2019.
Cash flow from operating activities was $2.3 billion in the first nine-month period of 2020 compared with the $2.7 billion generated in the prior-year comparable period. Free cash flow was $616 million in the reported quarter compared with the prior-year quarter’s $597 million.
Price Performance
International Paper’s shares have fallen 6.6% year to date, compared with the industry’s decline of 10.3%.
Zacks Rank & Other Stocks to Consider
International Paper currently carries a Zacks Rank #1 (Strong Buy).
Some other top-ranked stocks in the basic materials space are Agnico Eagle Mines Limited (AEM - Free Report) , Barrick Gold Corporation (GOLD - Free Report) and Newmont Corporation (NEM - Free Report) . While Agnico Eagle Mines sports a Zacks Rank #1, Barrick Gold and Newmont carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Agnico Eagle Mines has an expected earnings growth rate of 102% for the current year. The company’s shares have surged 24% year to date.
Barrick Gold has a projected earnings growth rate of 99% for the current year. The company’s shares have gained 39% year to date.
Newmont has an estimated earnings growth rate of 91% for the ongoing year. Its shares have appreciated 35% so far this year.
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It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
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International Paper Company (IP - Free Report) reported third-quarter 2020 adjusted earnings of 71 cents per share, which outpaced the Zacks Consensus Estimate of 48 cents. However, the bottom line declined 35% year over year from $1.09 reported in the prior year quarter. The downside was due to disappointing performances across all segments.
Including one-time items, the company posted earnings per share of 52 cents during the the third quarter of 2020 compared with the year-ago quarter’s 87 cents.
Net sales declined 8% to $5,123 million in the third quarter from the year-ago quarter’s $5,568 million. However, the top line surpassed the Zacks Consensus Estimate of $5,031 million.
Segment Performance
Industrial Packaging: Sales in this segment decreased 1% year over year to $3,768 million in the third quarter from the year-earlier quarter’s $3,820 million. Operating profit fell 12% year over year to $469 million.
Global Cellulose Fibers: This segment’s sales were $564 million in the third quarter, down 10% from the prior-year quarter. The segment incurred an operating loss of $59 million, against the year-ago quarter’s operating profit of $4 million.
Printing Papers: Sales of this segment came in at $743 million, down 31% from the $1,071 million reported in the year-earlier quarter. The segment’s operating profit plunged 61% year over year to $63 million in third-quarter 2020.
Financial Position
Cash and temporary investments aggregated $678 million as of Sep 30, 2020 compared with $511 million as of Dec 31, 2019. As of Sep 30, 2020, long-term debt was $8.5 billion compared with $9.6 billion as of Dec 31, 2019.
Cash flow from operating activities was $2.3 billion in the first nine-month period of 2020 compared with the $2.7 billion generated in the prior-year comparable period. Free cash flow was $616 million in the reported quarter compared with the prior-year quarter’s $597 million.
Price Performance
International Paper’s shares have fallen 6.6% year to date, compared with the industry’s decline of 10.3%.
Zacks Rank & Other Stocks to Consider
International Paper currently carries a Zacks Rank #1 (Strong Buy).
Some other top-ranked stocks in the basic materials space are Agnico Eagle Mines Limited (AEM - Free Report) , Barrick Gold Corporation (GOLD - Free Report) and Newmont Corporation (NEM - Free Report) . While Agnico Eagle Mines sports a Zacks Rank #1, Barrick Gold and Newmont carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Agnico Eagle Mines has an expected earnings growth rate of 102% for the current year. The company’s shares have surged 24% year to date.
Barrick Gold has a projected earnings growth rate of 99% for the current year. The company’s shares have gained 39% year to date.
Newmont has an estimated earnings growth rate of 91% for the ongoing year. Its shares have appreciated 35% so far this year.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by referendums and legislation, this industry is expected to blast from an already robust $17.7 billion in 2019 to a staggering $73.6 billion by 2027. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot stocks we're targeting >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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