USA – International Paper (IP) has reported a 1.6% increase in net sales for Q3 2024, reaching US$4.69 billion, up from US$4.61 billion in Q3 2023.
Despite the revenue growth, net earnings stood at US$150 million, translating to US$0.42 per diluted share.
However, the company faced mixed results across its business segments due to fluctuating costs and seasonal factors.
In its Industrial Packaging segment, Q3 operating profit dropped to US$197 million from US$291 million in Q2.
Although higher sales prices for boxes and containerboard provided a boost, this was overshadowed by seasonally lower sales volumes, increased operating costs, and planned outage expenses.
The North American market faced an additional setback from one fewer shipping day, which affected overall sales volumes.
Operating costs rose due to factors such as labor and employee benefits, as well as increased energy and wood expenses.
On a positive note, IP received insurance compensation tied to a fire incident at its Ixtac, Mexico plant earlier in 2024.
Meanwhile, the EMEA Packaging segment also experienced lower operating profit due to seasonal volume dips and higher input costs, though partially offset by lower planned outage and operational costs.
In the Global Cellulose Fibers segment, Q3 operating profit rose to US$40 million from US$31 million in the previous quarter, reflecting increased sales prices for pulp grades and reduced outage expenses.
However, higher operating costs—stemming from mill reliability issues, employee benefit expenses, and timing of expenditures—offset some of these gains.
Input costs remained stable overall, with reductions in energy and chemical expenses balanced by higher wood costs.
IP’s Chairman and CEO, Andy Silvernail, highlighted that Q3 earnings exceeded expectations, supported by IP’s packaging strategy and gradual improvements in box demand.
Looking ahead, he emphasized the company’s focus on sustainable growth, achieved through organizational restructuring, cost reductions, and targeted investments in IP’s most competitive assets.
This strategy includes facility closures to reduce operating costs and exploring strategic alternatives for the Global Cellulose Fibers segment. Silvernail acknowledged the challenges of these restructuring efforts and reassured that support would be provided for affected employees.
Anticipating the upcoming merger with DS Smith, slated for early Q1 2025, Silvernail expressed confidence in IP’s transformational path, which he believes will drive substantial value for employees, customers, and shareholders.
International Paper, a global leader in sustainable packaging and fiber-based products, is also recognized as one of the world’s top recyclers, reinforcing its commitment to sustainable growth and industry leadership.
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