MEMPHIS, Tenn. - International Paper (NYSE: IP) reported its second-quarter financial results for 2024, revealing mixed outcomes that have led to a slight downturn in its stock.
The company's adjusted earnings per share (EPS) of $0.55 outperformed the analyst consensus of $0.41, marking a significant beat. However, revenue for the quarter was slightly below expectations at $4.73 billion, compared to the predicted $4.78 billion, resulting in a 2.7% decline in the company's share price.
The EPS beat was overshadowed by the revenue shortfall, which seems to have driven investor sentiment, as reflected in the stock's negative movement. The company's net earnings reported were $498 million, which included a substantial tax benefit of $338 million related to internal legal entity restructuring. When compared to the same quarter last year, the revenue showed a marginal increase from $4.68 billion, indicating a year-on-year (YoY) growth.
Andy Silvernail, Chief Executive Officer, commented on the results, expressing confidence in the company's ability to unlock substantial value moving forward. He acknowledged the sequential improvement in the second quarter's financial performance due to better pricing and seasonally higher volumes but cautioned that near-term performance could be challenged. Silvernail emphasized the company's focus on deploying an 80/20 business process to accelerate improvement, concentrate on its portfolio, and optimize costs for profitable growth.
The company's industrial packaging segment reported a notable operating profit of $291 million for the quarter, up from $216 million in the first quarter of 2024, driven by higher sales prices for boxes and containerboard, as well as increased sales volumes. The global cellulose fibers segment also saw an improvement, with an operating profit of $31 million compared to a loss of $47 million in the previous quarter, attributed to higher average sales prices and lower operating costs.
International Paper's cash provided by operations stood at $365 million for the quarter, and the company returned $160 million to shareholders in dividends.
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