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International Paper (IP) Q1 Earnings & Sales Top Estimates, Up Y/Y

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International Paper Company (IP - Free Report) reported first-quarter 2021 adjusted earnings of 76 cents per share, which beat the Zacks Consensus Estimate of 59 cents. The bottom line also increased 33.3% year over year.

Including one-time items, the company posted earnings per share of 88 cents in first-quarter 2021 as against the loss per share of 36 cents seen in the year-ago quarter.

Net sales came in at $5.36 billion in the first quarter compared with the year-ago quarter’s $5.35 billion. The top line also topped the Zacks Consensus Estimate of $5.29 billion.

Adjusted cost of sales came in at $3,847 million, up 4.6% from the prior-year quarter’s $3,677 million. Gross profit declined 9.5% year over year to $1,516 million. Adjusted selling and administrative expenses fell 19.6% year over year to $336 million during the reported quarter. Adjusted operating profit was $299 million, reflecting year-over-year growth of 32.3%.

International Paper Company Price, Consensus and EPS Surprise

International Paper Company Price, Consensus and EPS Surprise

International Paper Company price-consensus-eps-surprise-chart | International Paper Company Quote

Segment Performance

Industrial Packaging: Sales in this segment came in at $3.95 billion compared with the prior-year quarter’s $3.82 billion. Operating profit fell 4.8% year over year to $447 million.

Global Cellulose Fibers: In the reported quarter, the segment’s sales climbed 2.3% to $581 million from the prior-year quarter. The segment incurred an operating loss of $82 million in the reported quarter compared with the year-ago quarter’s loss of $54 million.

Printing Papers: Sales of this segment amounted to $781 million, reflecting a decline of 14% from the year-earlier quarter. The segment’s operating profit fell 16.7% year over year to $80 million.

Financial Position

Cash and temporary investments aggregated $787 million as of Mar 31, 2021 compared with $595 million as of Dec 31, 2020. In the first quarter, the company returned $331 million to shareholders and reduced debt by $108 million. At the end of the first quarter, the company’s long-term debt came in at $7.9 billion.

Cash flow from operating activities was $512 million in first-quarter 2021 compared with the prior-year quarter’s $649 million. Free cash flow was $423 million in the January-March period compared with the $363 million witnessed in the year-ago period.

The company anticipates strong demand for corrugated packaging and absorbent pulp, and the supply demand scenario to improve in the printing papers business. These are likely to aid the company’s current-year performance.

Price Performance

International Paper’s shares have gained 68.4% in the past year, compared with the industry’s rally of 74.9%.


 

Zacks Rank & Stocks to Consider

International Paper currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the basic materials space include Impala Platinum Holdings Limited (IMPUY - Free Report) Nucor Corporation (NUE - Free Report) and Cabot Corporation (CBT - Free Report) . While Impala and Nucor flaunt a Zacks Rank #1 (Strong Buy), Cabot carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Impala Platinum Holdings has an expected earnings growth rate of 198% for the current fiscal year. The company’s shares have soared 267% in the past year.

Nucor has an estimated earnings growth rate of 190% for the current fiscal year. The company’s shares have rallied 99% over the past year.

Cabot Corporation has a projected earnings growth rate of 93% for the current fiscal year. The company’s shares have appreciated 65% in a year’s time.

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