International Paper Third Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component International Paper (NYSE:IP) will unveil its latest earnings on Thursday, October 25, 2012. International Paper is a global paper and packaging company with operations in North America, Europe, Latin America, Russia, Asia and North Africa.

International Paper Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for profit of 77 cents per share, a decline of 16.3% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved down from 82 cents. Between one and three months ago, the average estimate moved down. It has risen from 76 cents during the last month. For the year, analysts are projecting net income of $2.56 per share, a decline of 17.4% from last year.

Past Earnings Performance: Last quarter, the company missed estimates by one cent, coming in at profit of 46 cents per share versus a mean estimate of net income of 47 cents per share. In the first quarter, the company beat estimates by 6 cents.

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A Look Back: In the second quarter, profit fell 40.2% to $134 million (31 cents a share) from $224 million (52 cents a share) the year earlier, missing analyst expectations. Revenue rose 6.5% to $7.08 billion from $6.65 billion.

Stock Price Performance: Between July 26, 2012 and October 19, 2012, the stock price rose $4.98 (15.4%), from $32.44 to $37.42. The stock price saw one of its best stretches over the last year between December 30, 2011 and January 10, 2012, when shares rose for seven straight days, increasing 5.8% (+$1.72) over that span. It saw one of its worst periods between May 1, 2012 and May 10, 2012 when shares fell for eight straight days, dropping 6.5% (-$2.16) over that span.

Wall St. Revenue Expectations: On average, analysts predict $7.08 billion in revenue this quarter, a rise of 6.8% from the year-ago quarter. Analysts are forecasting total revenue of $27.89 billion for the year, a rise of 7.1% from last year’s revenue of $26.03 billion.

Key Stats:

The company is trying to use this earnings announcement to rebound from profit declines in the last three quarters. Net income fell 18.7% in the fourth quarter of the last fiscal year, by 45% in the first quarter and again in the second quarter.

On the top line, the company is looking to build on two-straight revenue increases with this earnings announcement. Revenue rose 4.2% in the first quarter before climbing again in the second quarter.

Analyst Ratings: With nine analysts rating the stock a buy, none rating it a sell and three rating the stock a hold, there are indications of a bullish stance by analysts.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.78 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term. The company regressed in this liquidity measure from 1.83 in the first quarter to the last quarter driven in part by an increase in liabilities. Current liabilities increased 3.9% to $5.23 billion while assets rose 0.7% to $9.28 billion.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)

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