International Paper Company IP delivered first-quarter 2019 adjusted earnings of $1.11 per share, up 18% year over year. The bottom-line figure also outpaced the Zacks Consensus Estimate of 91 cents.
Including one-time items, earnings in the first quarter came in at $1.05 compared with the year-ago quarter’s $1.74.
Net sales improved to $5,643 million in the reported quarter from $5,621 million recorded in the year-ago quarter. The reported figure, however, missed the Zacks Consensus Estimate of $5,741 million.
Adjusted cost of sales was $3,956 million, down from $3,966 million recorded in the prior-year quarter. Adjusted gross profit climbed 2% year over year to $1,687 million. Selling and administrative expenses dropped 2% year over year to $413 million in the quarter. Adjusted operating earnings of $447 million indicated a year-over-year improvement of 13%.
International Paper Company Price, Consensus and EPS Surprise
International Paper Company Price, Consensus and EPS Surprise | International Paper Company Quote
Industrial Packaging: Sales in this segment increased to $3,832 million from $3,827 million in the year-ago period. Adjusted operating profit declined 9% year over year to $421 million.
Printing Papers: This segment’s sales were $1,065 million in the reported quarter, up 1.1% from $1,053 million in the year-earlier quarter. Adjusted operating profit for the segment was $144 million compared with $64 million recorded in the year-ago quarter.
Global Cellulose Fibers: Sales of this segment came in at $689 million compared with $677 million posted in the prior-year quarter. The segment’s adjusted operating profit increased to $35 million from $15 million in the year-ago quarter.
Cash and temporary investments aggregated $641 million at the end of the first quarter compared with $589 million at the end of the 2018-end. As of the quarter’s end, long-term debt was $9,965 million compared with $10,015 million as of Dec 31, 2018.
Cash flow from operating activities was $733 million in the reported quarter compared with $663 million witnessed in the prior-year period. Free cash flow was $440 million during the January-March quarter compared with the year-earlier quarter’s $174 million.
International Paper returned $400 million to shareholders through dividends and share repurchases during the March-end quarter.
The company projects improved seasonal demand in the ongoing quarter. It is also well poised to generate strong cash flows in 2019.
International Paper’s shares have lost 15.4% over the past year compared with the industry’s decline of 34.8%.
Zacks Rank & Stocks to Consider
The company currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the basic materials space are Sandstorm Gold Ltd SAND, Innospec Inc IOSP and Fortescue Metals Group Ltd FSUGY, each currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Sandstorm Gold has an expected earnings growth rate of 200% for 2019. The company’s shares have gained 13.7% in the past year.
Innospec has an expected earnings growth rate of 3.5% for the current year. The company’s shares have appreciated 12.8% in a year’s time.
Fortescue Metals has an expected earnings growth rate of 101.5% for 2019. Its shares have surged 53.3% in a year’s time.
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