International Paper Co.'s (IP) first-quarter net income surged
89% on a $540 million tax credit, as the company reported flat
revenue but improved profit margins.
The company cut expenses as deteriorating demand, high costs and
a sluggish housing market sapped its core businesses.
International Paper reported net income of $261 million, or 61
cents a share, up from $138 million, or 31 cents a share, a year
earlier. Excluding items like the alternative fuel credits,
earnings slumped to 8 cents a share from 41 cents a share.
Revenue remained flat at $5.67 billion.
Analysts polled by Thomson Reuters expected a loss of 4 cents on
$6.28 billion in revenue.
Its gross margin rose to 34.2% from 24.8%, but increased
overhead and write-downs hurt the bottom line.
Revenue from the printing paper division fell 23%, but profit
surged 64% as strong mill operations and lower costs were met with
continued weak demand in the global paper and pulp markets. Except
for pulp, International Paper said pricing remained fairly steady
in North America. Industrial packaging revenue surged 51% as its
profit more than tripled.
International Paper's shares were inactive premarket after
closing Wednesday at $10.90. The shares have fallen nearly
two-thirds since September but rebounded sharply from a low of
$3.93 last month.
-By Veronica Dagher and John Kell, Dow Jones Newswires;
201-938-5400; veronica.dagher@dowjones.com