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Paper Stocks Reporting Q2 Earnings on Jul 28: IP & MERC
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The Q2 earnings season is gaining momentum with 189 companies on the S&P 500 index reporting this week. Although it is too early to predict any clear pattern, the 126 companies that have reported results through Friday (Jul 22), more or less confirm the grim earnings projections for the quarter. Based on the hitherto declared results, Q2 is widely expected to be the fifth consecutive quarter to report an earnings decline for the benchmark index.
Plagued by a plethora of macroeconomic issues and continued volatility in the equity market, Q2 earnings estimates for the S&P 500 index have hovered in the negative territory, improving slightly from the last quarter. Per the latest Earnings Trend Report, overall Q2 earnings for the S&P 500 companies are expected to be down 3.4% on a 0.5% decline in revenues. The relative improvement in negative estimate revisions for the quarter is largely due to a turnaround in oil prices and fading effects of the dollar strength. The S&P 500 has also witnessed a dramatic reversal in its fortunes when it shrugged off about 5.3% drop in just two trading sessions (on the Brexit referendum) to record over 2% return for the quarter.
However, the overall Q2 earnings scenario still remains clouded with uncertainty. What is more alarming is that the likely dismal earnings performance is not attributable to the inherent weakness of the Energy sector alone. Rather, downward estimate revisions are expected in almost all the sectors, barring a few. About 9 of the 16 sectors are expected to witness an earnings decline in the quarter under review, with Oil/Energy, Basic Materials, Transportation and Industrial Products being the most notable.
Among the Paper stocks slated to report this week, let’s have a sneak peek at two major industry players to see how things are gearing up for the upcoming quarterly results.
International Paper Company (IP - Free Report) is scheduled to report second-quarter 2016 earnings before the opening bell tomorrow. International Paper is undergoing restructuring initiatives to transform itself into a core packaging company. The company recently divested its corrugated packaging business in China and Southeast Asia. During the quarter, International Paper also inked a definite agreement with leading timberland owner Weyerhaeuser Co. (WY - Free Report) to acquire the latter’s pulp business for $2.2 billion in cash. With a combined capacity of nearly 1.9 million metric tons of pulp, the transaction is likely to strengthen International Paper’s position in the global fluff pulp market and augment its operating cash flow. A focused initiative to invest more resources in high-return capital projects within its core businesses is likely to drive additional earnings growth in the quarter. For the impending quarter, this Zacks Rank #3 (Hold) stock has an Earnings ESP of +2.38%, making an earnings beat likely. (Read more: Will International Paper Retain its Earnings Streak in Q2?)
Mercer International Inc. (MERC - Free Report) will report second-quarter 2016 results after the closing bell tomorrow. The company expects to face some top-line headwinds including annual maintenance downtime for its Rosenthal, Stendal and Celgar mills. Moreover, the company expects seasonal maintenance downtime in Europe and weak inventories in China to put pressure on pulp prices in second-quarter 2016. For the impending quarter, this Zacks Rank #5 (Strong Sell) stock has an Earnings ESP of 0.00%, making surprise prediction uncertain for this global pulp manufacturing firm.
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Paper Stocks Reporting Q2 Earnings on Jul 28: IP & MERC
The Q2 earnings season is gaining momentum with 189 companies on the S&P 500 index reporting this week. Although it is too early to predict any clear pattern, the 126 companies that have reported results through Friday (Jul 22), more or less confirm the grim earnings projections for the quarter. Based on the hitherto declared results, Q2 is widely expected to be the fifth consecutive quarter to report an earnings decline for the benchmark index.
Plagued by a plethora of macroeconomic issues and continued volatility in the equity market, Q2 earnings estimates for the S&P 500 index have hovered in the negative territory, improving slightly from the last quarter. Per the latest Earnings Trend Report, overall Q2 earnings for the S&P 500 companies are expected to be down 3.4% on a 0.5% decline in revenues. The relative improvement in negative estimate revisions for the quarter is largely due to a turnaround in oil prices and fading effects of the dollar strength. The S&P 500 has also witnessed a dramatic reversal in its fortunes when it shrugged off about 5.3% drop in just two trading sessions (on the Brexit referendum) to record over 2% return for the quarter.
However, the overall Q2 earnings scenario still remains clouded with uncertainty. What is more alarming is that the likely dismal earnings performance is not attributable to the inherent weakness of the Energy sector alone. Rather, downward estimate revisions are expected in almost all the sectors, barring a few. About 9 of the 16 sectors are expected to witness an earnings decline in the quarter under review, with Oil/Energy, Basic Materials, Transportation and Industrial Products being the most notable.
Among the Paper stocks slated to report this week, let’s have a sneak peek at two major industry players to see how things are gearing up for the upcoming quarterly results.
International Paper Company (IP - Free Report) is scheduled to report second-quarter 2016 earnings before the opening bell tomorrow. International Paper is undergoing restructuring initiatives to transform itself into a core packaging company. The company recently divested its corrugated packaging business in China and Southeast Asia. During the quarter, International Paper also inked a definite agreement with leading timberland owner Weyerhaeuser Co. (WY - Free Report) to acquire the latter’s pulp business for $2.2 billion in cash. With a combined capacity of nearly 1.9 million metric tons of pulp, the transaction is likely to strengthen International Paper’s position in the global fluff pulp market and augment its operating cash flow. A focused initiative to invest more resources in high-return capital projects within its core businesses is likely to drive additional earnings growth in the quarter. For the impending quarter, this Zacks Rank #3 (Hold) stock has an Earnings ESP of +2.38%, making an earnings beat likely. (Read more: Will International Paper Retain its Earnings Streak in Q2?)
INTL PAPER Price and EPS Surprise
INTL PAPER Price and EPS Surprise | INTL PAPER Quote
Mercer International Inc. (MERC - Free Report) will report second-quarter 2016 results after the closing bell tomorrow. The company expects to face some top-line headwinds including annual maintenance downtime for its Rosenthal, Stendal and Celgar mills. Moreover, the company expects seasonal maintenance downtime in Europe and weak inventories in China to put pressure on pulp prices in second-quarter 2016. For the impending quarter, this Zacks Rank #5 (Strong Sell) stock has an Earnings ESP of 0.00%, making surprise prediction uncertain for this global pulp manufacturing firm.
MERCER INTL SBI Price and EPS Surprise
MERCER INTL SBI Price and EPS Surprise | MERCER INTL SBI Quote
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