International Paper Company (IP - Free Report) reported first-quarter 2020 adjusted earnings of 57 cents per share, significantly down 49% year over year. However, the bottom line outpaced the Zacks Consensus Estimate of 43 cents.
Including one-time items, the company incurred net loss per share of 36 cents during the first quarter, as against the year-ago quarter’s reported earnings per share of $1.05.
Net sales declined to $5,352 million in the first quarter from the year-ago quarter’s $5,643 million. However, the reported figure beat the Zacks Consensus Estimate of $5,227 million.
Cost of sales was $3,746 million, down from the prior-year quarter’s $3,929 million. Gross profit declined 6.3% year over year to $1,606 million. Selling and administrative expenses flared up 1.2% year over year to $418 million in the March-end quarter. Segment operating profit came in at $512 million, reflecting a year-over-year decline of 15%.
International Paper Company Price, Consensus and EPS Surprise
Segment Performance
Industrial Packaging: Sales in this segment fell to $3,819 million in the first quarter from the year-earlier quarter’s $3,832 million. Operating profit increased 12% year over year to $470 million.
Printing Papers: This segment’s sales were $908 million in the January-March quarter, down 15% from the prior-year quarter’s $1,065 million. Operating profit for the segment was $96 million compared with the year-ago period’s $144 million.
Global Cellulose Fibers: Sales of this segment came in at $568 million compared with the $689 million witnessed in the prior-year quarter. The segment reported an operating loss of $54 million in first-quarter 2020 against an operating profit of $35 million posted in the year-ago period.
Balance Sheet
Cash and temporary investments aggregated $1,239 million as of Mar 31, 2020 compared with $511 million as of Dec 31, 2019. As of Mar 30, 2020, long-term debt was $9.5 billion compared with $9.6 billion as of Dec 31, 2019.
Cash flow from operating activities was $649 million in the March-end quarter compared with the $733 million generated in the year-earlier period. Free cash flow was $363 million in the reported quarter compared with the prior-year quarter’s $440 million.
The company is implementing prudent measures to strengthen its liquidity position to battle the coronavirus crisis.
Price Performance
International Paper’s shares have lost 22% over the past year compared with the industry’s decline of 29.6%.
Zacks Rank & Key Picks
International Paper currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the basic materials space are Newmont Corporation (NEM - Free Report) , Barrick Gold Corporation (GOLD - Free Report) and Franco-Nevada Corporation (FNV - Free Report) . While Newmont and Barrick Gold sport a Zacks Rank #1 (Strong Buy), Franco-Nevada carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Newmont has an expected earnings growth rate of 90.2% for 2020. The company’s shares have surged 103.6% in the past year.
Barrick Gold has an estimated earnings growth rate of 60.8% for the ongoing year. Its shares have soared 112.7% over the past year.
Franco-Nevada has a projected earnings growth rate of 19.2% for the current year. The company’s shares have appreciated 92.5% in a year’s time.
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International Paper Company (IP - Free Report) reported first-quarter 2020 adjusted earnings of 57 cents per share, significantly down 49% year over year. However, the bottom line outpaced the Zacks Consensus Estimate of 43 cents.
Including one-time items, the company incurred net loss per share of 36 cents during the first quarter, as against the year-ago quarter’s reported earnings per share of $1.05.
Net sales declined to $5,352 million in the first quarter from the year-ago quarter’s $5,643 million. However, the reported figure beat the Zacks Consensus Estimate of $5,227 million.
Cost of sales was $3,746 million, down from the prior-year quarter’s $3,929 million. Gross profit declined 6.3% year over year to $1,606 million. Selling and administrative expenses flared up 1.2% year over year to $418 million in the March-end quarter. Segment operating profit came in at $512 million, reflecting a year-over-year decline of 15%.
International Paper Company Price, Consensus and EPS Surprise
Segment Performance
Industrial Packaging: Sales in this segment fell to $3,819 million in the first quarter from the year-earlier quarter’s $3,832 million. Operating profit increased 12% year over year to $470 million.
Printing Papers: This segment’s sales were $908 million in the January-March quarter, down 15% from the prior-year quarter’s $1,065 million. Operating profit for the segment was $96 million compared with the year-ago period’s $144 million.
Global Cellulose Fibers: Sales of this segment came in at $568 million compared with the $689 million witnessed in the prior-year quarter. The segment reported an operating loss of $54 million in first-quarter 2020 against an operating profit of $35 million posted in the year-ago period.
Balance Sheet
Cash and temporary investments aggregated $1,239 million as of Mar 31, 2020 compared with $511 million as of Dec 31, 2019. As of Mar 30, 2020, long-term debt was $9.5 billion compared with $9.6 billion as of Dec 31, 2019.
Cash flow from operating activities was $649 million in the March-end quarter compared with the $733 million generated in the year-earlier period. Free cash flow was $363 million in the reported quarter compared with the prior-year quarter’s $440 million.
The company is implementing prudent measures to strengthen its liquidity position to battle the coronavirus crisis.
Price Performance
International Paper’s shares have lost 22% over the past year compared with the industry’s decline of 29.6%.
Zacks Rank & Key Picks
International Paper currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the basic materials space are Newmont Corporation (NEM - Free Report) , Barrick Gold Corporation (GOLD - Free Report) and Franco-Nevada Corporation (FNV - Free Report) . While Newmont and Barrick Gold sport a Zacks Rank #1 (Strong Buy), Franco-Nevada carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Newmont has an expected earnings growth rate of 90.2% for 2020. The company’s shares have surged 103.6% in the past year.
Barrick Gold has an estimated earnings growth rate of 60.8% for the ongoing year. Its shares have soared 112.7% over the past year.
Franco-Nevada has a projected earnings growth rate of 19.2% for the current year. The company’s shares have appreciated 92.5% in a year’s time.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained and impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.
This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
See their latest picks free >>
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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