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What's in Store for International Paper's (IP) Q3 Earnings?

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International Paper Company IP is scheduled to report third-quarter 2021 results, before the opening bell on Oct 27.

Q3 Estimates

The Zacks Consensus Estimate for third-quarter total sales is pegged at $5.85 billion, suggesting an improvement of 14% from the prior-year quarter. The consensus mark for earnings currently stands at $1.47, indicating year-over-year growth of 107%. The earnings estimates have gone down 3% over the past 30 days.

Q2 Performance

In the last reported quarter, International Paper’s earnings and revenues beat the respective Zacks Consensus Estimate. Both earnings and revenues also improved year over year. The company has a trailing four-quarter earnings surprise of 16.7%, on average.

International Paper Company Price and EPS Surprise

International Paper Company Price and EPS Surprise
International Paper Company Price and EPS Surprise

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

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 is providing a significant boost to the company’s results as it has become a primary spending channel for customers due to the containment measures amid the coronavirus pandemic. These factors are likely to have favored International Paper’s third-quarter performance. Escalating recovered fiber, energy, chemicals, wood, distribution and transportation costs might have impacted margins in the quarter.

The Zacks Consensus Estimate for the Industrial Packaging segment’s revenues is currently pegged at $4,174 million compared with the prior-year quarter’s reported figure of $3,768 million. Solid demand for corrugated and containerboard packaging is likely to have benefited the segment’s sales performance. The segment’s operating profit for the quarter is projected to increase 19% year over year to $560 million.

The Zacks Consensus Estimate for the Printing Papers segment revenues stands at $869 million, suggesting growth of 17% from the year-earlier period. Demand for printing papers has been recovering lately as schools and offices are reopening. However, decline in commercial printing segments due to the significant pullback in print advertising and transition to digital media might have offset some of these gains. This segment is expected to report a quarterly operating profit of $117 million, indicating year-over-year growth of 86%.

The Global Cellulose Fibers business has been benefiting from solid consumer demand for absorbent hygiene and pulp products. The Zacks Consensus Estimate for the segment’s third-quarter revenues is pegged at $756 million, suggesting an improvement of 34% from the year-ago period. Mounting operational costs might have eroded the segment’s performance in the period under review. This segment is likely to report an operating profit of $81 million for the third quarter against an operating loss of $59 million incurred in the prior-year period.

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

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: The Earnings ESP for International Paper is -1.18%.

Zacks Rank: International Paper currently carries a Zacks Rank of 4 (Sell).

Price Performance

Zacks Investment Research
Zacks Investment Research

Image Source: Zacks Investment Research

Shares of International Paper have gained 14.6% over the past year, compared with the industry's growth of 24.0%.

Stocks Poised to Beat Estimates

Here are some companies in the basic materials space you may want to consider as our model shows that these have the right combination of elements to post earnings beat this quarter:

Teck Resources Ltd TECK has an Earnings ESP of +9.86% and a Zacks Rank of 1, currently.

Westlake Chemical Corporation WLK, a Zacks #1 Ranked stock, has an Earnings ESP of +1.22%.

WestRock Company WRK has a Zacks Rank #2 and an Earnings ESP of +0.25%, at present.


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Westlake Chemical Corporation (WLK) : Free Stock Analysis Report

International Paper Company (IP) : Free Stock Analysis Report

WestRock Company (WRK) : Free Stock Analysis Report

Teck Resources Ltd (TECK) : Free Stock Analysis Report

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