DOW JONES NEWSWIRES
International Paper Co.'s (IP) fourth-quarter profit fell 19% as
the forest-products company's industrial packaging business
reported lower sales.
Core profit was still better than expected as the company's
overall margin expanded.
Surging emerging-market demand--along with a rebound in global
manufacturing activity--helped hold up IP's top line earlier last
year, though revenue slipped in the past two quarters.
The paper-and-pulp company has been acquisitive of late,
offering to take over rival Temple-Inland Inc. (TIN) for $3.48
billion after months of resistance from the maker of corrugated
packaging and building products. IP also gained a 75% stake in
Andhra Pradesh Paper Mills, expanding its presence is a
fast-growing Indian market.
In the latest quarter, International Paper reported a profit of
$257 million or 59 cents a share, down from $316 million, or 73
cents a share, a year earlier. Excluding restructuring costs, tax
adjustments and other items, adjusted earnings edged down to 66
cents a share from 68 cents as revenue decreased 2.5% to $6.37
billion.
Analysts polled by Thomson Reuters were expecting 61 cents a
share and $6.5 billion, respectively.
Gross margin narrowed to 26.8% from 27%.
Sales at International Paper's industrial packaging segment
slipped 2.3%, but the unit's profit jumped 17% on stronger mill
operations, lower recycled fiber costs, higher box volume and wider
margins in Europe.
The printing papers business, which ships printing papers and
graphic equipment, posted a 0.6% increase in revenue, while
earnings fell 19% due to higher manufacturing costs.
Demand typically drops from the third to the fourth quarter
after back-to-school retail activity ends.
Shares closed at $31.38 Wednesday and were inactive premarket.
The stock is up 6.8% over the past year.
-By Drew FitzGerald, Dow Jones Newswires; 212-416-2909;
Andrew.FitzGerald@dowjones.com