International Paper Co (IP) Reports Q3 2023 Earnings
Net earnings of $165 million ($0.47 per diluted share); Adjusted operating earnings (non-GAAP) of $224 million ($0.64 per diluted share)
Generated $468 million in cash from operations, bringing the year-to-date total to $1.3 billion
Returned $160 million to shareholders in dividends, bringing the year-to-date total to $679 million in share repurchases and dividends
Completed the sale of Ilim Joint Venture interest for $508 million
International Paper Co (NYSE:IP) released its third quarter 2023 earnings report on October 26, 2023. The company reported net earnings of $165 million, or $0.47 per diluted share, and adjusted operating earnings (non-GAAP) of $224 million, or $0.64 per diluted share.
Financial Highlights
The company achieved $75 million of earnings from its Building a Better IP initiatives, bringing the year-to-date total to $195 million, exceeding full-year targets. Cash provided by operations was $468 million, bringing the year-to-date total to $1.3 billion. The company returned $160 million to shareholders in dividends, bringing the year-to-date total to $679 million in share repurchases and dividends. The company also completed the sale of its Ilim Joint Venture interest for $508 million.
Income Statement Overview
Net sales for the third quarter were $4.613 billion. The company reported net earnings of $165 million and adjusted operating earnings of $224 million. The company's business segment operating profit was $352 million.
Balance Sheet and Cash Flow Statement Summary
The company generated $468 million in cash from operations and reported free cash flow of $240 million. The company completed the sale of its Ilim Joint Venture interest for $508 million.
Management Commentary
Our third quarter results came in as expected, and we are encouraged by continuing demand recovery across our portfolio, said Mark Sutton, Chairman and Chief Executive Officer. We exceeded our full-year target for Building a Better IP through commercial and process improvement initiatives. Our operations continue to perform reliably with a focus on controlling costs. However, in this challenging macro environment, we are not satisfied with our absolute results. We are taking actions to structurally reduce fixed costs in our mill system, while optimizing our supply chain and investing in our box capabilities to grow with customers."
Financial Tables Summary
The company's net sales by business segment for the third quarter were $3.787 billion for Industrial Packaging and $725 million for Global Cellulose Fibers. The operating profit by business segment was $325 million for Industrial Packaging and $27 million for Global Cellulose Fibers.
Company Performance Analysis
Despite the challenging macro environment, International Paper Co (NYSE:IP) managed to meet its third quarter expectations. The company's focus on controlling costs and improving processes has led to reliable operations and exceeded full-year targets for its Building a Better IP initiatives. However, the company is not satisfied with its absolute results and is taking actions to structurally reduce fixed costs in its mill system, optimize its supply chain, and invest in its box capabilities to grow with customers.
Explore the complete 8-K earnings release (here) from International Paper Co for further details.
This article first appeared on GuruFocus.
