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What's in the Offing for International Paper's (IP) Q1 Earnings?

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International Paper Company (IP - Free Report) is scheduled to report first-quarter 2021 results, before the opening bell on Apr 29.

Q1 Estimates

The Zacks Consensus Estimate for International Paper’s quarterly earnings is currently pegged at 59 cents, indicating year-over-year growth of 3.5%. Moreover, the Zacks Consensus Estimate for total sales is pinned at $5.29 billion for the to-be-reported quarter, suggesting a fall of 1.2% year on year. The company has a trailing four quarters average earnings surprise of 43.1%.

Q4 Performance

In the last reported quarter, International Paper’s earnings and revenues missed the respective Zacks Consensus Estimate. Both bottom- and top-line figures declined year over year.

Factors to Note

International Paper’s products are essential to produce and deliver food, pharmaceuticals, hygiene products and emergency supplies for consumers globally. Additionally, the coronavirus pandemic has been fueling e-commerce growth as consumer demand for online grocery, beverage and pharmaceuticals delivery services has skyrocketed following the containment measures imposed by governments globally. These factors might get reflected in International Paper’s first-quarter top-line figure.

The Zacks Consensus Estimate for the Industrial Packaging segment’s revenues is currently pegged at $3,843 million compared with the prior-year quarter’s $3,819 million. The segment’s operating profit for the quarter is projected to decline 22.7% year on year to $363 million. Surging input costs on the escalating recovered fiber, seasonal energy and distribution costs as well as higher maintenance outage expense might have hurt the segment’s margins during the first quarter.

The Zacks Consensus Estimate for the Printing Papers segment revenues is pegged at $735 million, suggesting a decline of 19% from the year-earlier quarter. Paper consumption in schools, offices and businesses has been affected by the pandemic, consequently straining paper demand. Though demand for printing papers is improving, it remained below the prior-year levels. The company has also been witnessing unprecedented decline in commercial printing segments due to the significant pullback in print advertising. These are likely to have dampened the Printing Paper segment’s performance during the March-end quarter. Apart from this, soaring input costs as well as higher maintenance outage costs are likely to have hurt the segment. This segment is expected to report a quarterly operating profit of $63 million compared with the prior-year quarter’s $96 million.

The Global Cellulose Fibers business is benefiting from strong consumer demand for absorbent hygiene and tissue products. The Zacks Consensus Estimate for the segment’s revenues is pegged at $602 million for the quarter to be reported, calling for an improvement of 6% from the year-ago period. Nevertheless, mounting input costs and maintenance outage costs might have eroded the segment’s performance during the period under review. This segment is likely to report an operating loss of $66 million for the first quarter compared with the operating loss of $54 million incurred in the prior-year period.

Earnings Whispers

Our proven model doesn’t conclusively predict an earnings beat for International Paper this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: The Earnings ESP for International Paper is -0.42%.

Zacks Rank: International Paper currently carries a Zacks Rank of 3.

Price Performance

Shares of International Paper have gained 73% over the past year, compared with the industry's growth of 80.2%.

Stocks Poised to Beat Estimates

Here are some companies in the basic materials space you may want to consider as our model shows that these have the right combination of elements to post earnings beat this quarter:

Westlake Chemical Corporation (WLK - Free Report) sports a Zacks Rank #1 and has an Earnings ESP of +0.64%, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Bunge Limited (BG - Free Report) , currently a Zacks #2 Ranked stock, has an Earnings ESP of +4.99%.

The Mosaic Company (MOS - Free Report) has an Earnings ESP of +9% and carries a Zacks Rank of 3, currently.

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