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

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International Paper Company (IP - Free Report) is scheduled to report first-quarter 2022 results, before the opening bell on Apr 28.

Q1 Estimates

The Zacks Consensus Estimate for first-quarter total sales is pegged at $5 billion, suggesting a decline of 6.9% from the prior-year quarter’s levels. The consensus mark for earnings is currently at 52 cents, indicating a year-over-year decline of 31.6%. The earnings estimates have gone down 3.7% in the past 30 days.

Q4 Performance

In the last reported quarter, International Paper’s earnings and revenues rose year over year. While the bottom line missed the Zacks Consensus Estimate, the top line beat the same. Over the trailing four quarters, the company has surpassed the Zacks Consensus Estimate for earnings in two of the trailing quarters and missed twice, the average surprise being a positive 2.97%.

Factors to Note

International Paper’s products are essential for producing and delivering food, pharmaceuticals, hygiene products and emergency supplies to consumers globally. Growing e-commerce demand has been boosting the company’s performance as it has become a primary spending channel for customers due to the containment measures amid the coronavirus pandemic. However, the widespread supply-chain constraints might have impaired the company’s ability to meet high demand. These factors are likely to get reflected in International Paper’s first-quarter performance.

Escalating input costs, distribution and transportation costs might have impacted margins in the quarter. Restoration process of the second Prattville machine might have led to an additional cost in the to-be-reported quarter. The company had cautioned that the first quarter is anticipated to be the highest maintenance outage quarter for the year.  

The Zacks Consensus Estimate for the Industrial Packaging segment’s revenues is currently pegged at $4,218 million, suggesting an increase from the prior-year quarter’s reported figure of $3,953 million. Solid demand for corrugated and containerboard packaging is likely to have favored the segment’s sales. However, escalating costs, Omicron-related labor absenteeism and maintenance outage expenses might have dented the segment’s margins. The segment’s operating profit for the quarter is projected to decline 31% year over year to $307 million.

The Global Cellulose Fibers business has been witnessing solid consumer demand for the absorbent pulp products. However, the segment’s pulp shipments might have been affected by port congestion and vessel delays. The Zacks Consensus Estimate for the segment’s first-quarter revenues is pegged at $712 million, suggesting an improvement of 23% from the year-ago quarter’s levels. Higher input costs, operational costs and maintenance outage expenses might have eroded the segment’s performance in the period under review. The segment is likely to incur an operating loss of $62 million for the first quarter against the prior-year quarter’s $82 million.

International Paper Company Price and EPS Surprise

 

International Paper Company Price and EPS Surprise

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

 

What the Zacks Model Unveils

Our proven model doesn’t conclusively predict an earnings beat for International Paper this time around. 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: International Paper has an Earnings ESP of -5.16%.

Zacks Rank: It currently carries a Zacks Rank #3.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Price Performance

Shares of International Paper have fallen 16.2% in the past year compared with the industry's decline of 10.9%.

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Image Source: Zacks Investment Research

Other Stocks Poised to Beat Estimates

Here are some other Basic Materials stocks, which you may consider, as our model shows that these too have the right combination of elements to post an earnings beat in their upcoming releases.

The Mosaic Company (MOS - Free Report) has an Earnings ESP of +0.89% and a Zacks Rank #1. The Zacks Consensus Estimate for the company's earnings for the first quarter of 2022 indicates year-over-year growth of 328%. The estimate has moved up 2.5% in the past 30 days.

Mosaic has an average surprise history of 3.7% in the trailing four quarters. MOS’s shares have gained 102% in the past year.

Carpenter Technology (CRS - Free Report) has an Earnings ESP of +10.99% and a Zacks Rank #2. The Zacks Consensus Estimate for the first quarter of 2022 suggests a loss of 30 cents.

Shares of Carpenter Technology have gained 11.1% over the past year. CRS' earnings topped the consensus mark in each of the trailing four quarters, the average surprise being 21.8%.

Huntsman Corporation (HUN - Free Report) has an Earnings ESP of +1.88% and a Zacks Rank #3. The Zacks Consensus Estimate for the company's earnings for the first quarter of 2022 indicates year-over-year growth of 51.5%. The estimate has moved up 2% over the past 30 days.

Shares of Huntsman have appreciated 27.6% over the past year. HUN's earnings beat the consensus mark in each of the trailing four quarters, the average surprise being 10.8%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.