International Paper Co. Earnings Cheat Sheet: Increase in Profit Year Over Year

S&P 500 (NYSE:SPY) component International Paper Co. (NYSE:IP) reported net income above Wall Street’s expectations for the third quarter. International Paper is a global paper and packaging company with operations in North America, Europe, Latin America, Russia, Asia and North Africa.

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International Paper Earnings Cheat Sheet for the Third Quarter

Results: Net income for the paper company rose to $518 million ($1.19 per share) vs. $397 million (91 cents per share) in the same quarter a year earlier. This marks a rise of 30.5% from the year earlier quarter.

Revenue: Fell 1.3% to $6.63 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: IP reported adjusted net income of 92 cents per share. By that measure, the company beat the mean estimate of 80 cents per share. It fell short of the average revenue estimate of $6.78 billion.

Quoting Management: “IP delivered a strong quarter in a tough environment,” said John Faraci, Chairman and Chief Executive Officer. “We are consistently generating higher profits and cash flow from our transformed portfolio with an international footprint that has strengthened our earnings power. Even as some expected challenges persisted in the third quarter, including weak economic growth in developed markets and input cost inflation, we look ahead with confidence as we continue to capitalize on our balanced portfolio and realize gains from recent investments.”

Key Stats:

Gross margins fell 1.5 percentage points to 27.7%. The contraction appeared to be driven by falling revenue, as the figure fell 1.3% from the year earlier while costs rose 0.7%.

A year-over-year revenue decrease last quarter snaps a streak of four consecutive quarters of revenue increases. The best quarter in that span was the third quarter of the last fiscal year, which saw revenue rise 13.5%.

The company has now topped analyst estimates for the last four quarters. It beat the mark by 14 cents in the second quarter, by 15 cents in the first quarter, and by 3 cents in the fourth quarter of the last fiscal year.

Looking Forward: Expectations for the company’s next quarter results are lower than they have been. Over the past sixty days, the average estimate for fourth quarter has fallen from 69 cents per share to 64 cents. For the fiscal year, the average estimate has moved up from $2.86 a share to $2.99 over the last ninety days.

Competitors to Watch: Clearwater Paper Corp (NYSE:CLW), P.H. Glatfelter Company (NYSE:GLT), Wausau Paper Corp. (NYSE:WPP), MeadWestvaco Corp. (NYSE:MWV), KapStone Paper and Packaging Corp. (NYSE:KS), Boise Inc. (NYSE:BZ), UPM-Kymmene Corp. (UPMKY), Buckeye Technologies Inc. (NYSE:BKI), Fibria Celulose S.A. (NYSE:FBR), and Domtar Corp. (NYSE:UFS).

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(Source: Xignite Financials)