MEMPHIS, Tenn., Oct. 31, 2019 -- International Paper (NYSE: IP) today reported third quarter 2019 financial results.
- Third quarter net earnings attributable to International Paper of $344 million ($0.87 per diluted share) compared with $292 million ($0.73 per diluted share) in the second quarter of 2019 and $562 million ($1.37 per diluted share) in the third quarter of 2018
- Third quarter adjusted operating earnings* (non-GAAP) of $431 million ($1.09 per diluted share) compared with $460 million ($1.15 per diluted share) in the second quarter of 2019 and $641 million ($1.56 per diluted share) in the third quarter of 2018
- Third quarter cash provided by operations of $882 million and year-to-date of $2.7 billion compared with $2.4 billion year-to-date in the same period of 2018
- Strong operating performance and cost management
- Third quarter debt repayment of $383 million
- Third quarter share repurchases of $74 million, bringing the trailing 12 month total to $685 million
"International Paper delivered another quarter of solid earnings and strong cash generation," said Mark Sutton, Chairman and Chief Executive Officer. "We continue to demonstrate the strength and resilience of our cash engine and our ability to perform well in a challenging global environment. Looking ahead to the fourth quarter, we will continue to maximize performance by optimizing our full value chain from fiber to the customer."
Diluted Net EPS Attributable to International Paper Shareholders and Adjusted Operating EPS
* Adjusted operating earnings (non-GAAP) is defined as net earnings from continuing operations attributable to International Paper Company (GAAP) excluding special items and non-operating pension expense. Management uses this measure to focus on on-going operations, and believes that it is useful to investors because it enables them to perform meaningful comparisons of past and present consolidated operating results. For discussion of special items, net and non-operating pension expense, see the footnotes to the Consolidated Statement of Operations.
Key Financial Measures
Business segment operating profits are used by International Paper's management to measure the earnings performance of its businesses. Third quarter 2019 business segment net sales and operating profits compared with the second quarter of 2019 and the third quarter of 2018 are as follows:
Industrial Packaging operating profits in the third quarter of 2019 were $510 million ($535 million excluding special items) compared with $507 million ($515 million excluding special items) in the second quarter of 2019. In North America, earnings increased due to improved demand for boxes and export containerboard, lower planned maintenance outage expenses and lower input costs, primarily for recycled containerboard and wood. Earnings were negatively impacted by lower export containerboard prices and seasonally higher manufacturing operations. In Europe, earnings improved driven by higher average margins and favorable manufacturing operations which benefited from continued improved performance at the Madrid, Spain mill, partially offset by seasonally lower volumes, primarily in Morocco.
Global Cellulose Fibers operating profits in the third quarter of 2019 were $(3) million ($4 million excluding special items) compared with $(2) million ($0 million excluding special items) in the second quarter of 2019. Lower planned maintenance outage expenses and input costs, primarily for energy, chemicals and wood were mostly offset by lower average sales prices for fluff and market pulp and increased economic downtime.
Printing Papers operating profits in the third quarter of 2019 were $148 million ($162 million excluding special items) versus $(33) million ($114 million excluding special items) in the second quarter of 2019. Earnings in both periods were negatively affected by the net impairment of our India Papers business, included as a special item below. In North America, earnings increased due to improved manufacturing operations and lower planned maintenance outage expenses. Average sales margins were slightly lower, primarily due to an unfavorable geographic mix. In Brazil, earnings increased due to seasonally stronger demand and a favorable geographic mix, partially offset by unfavorable export average sales prices. In Europe and Russia, earnings increased primarily due to lower planned maintenance outages in both regions.
Source: International Paper