IP reports quarter-to-quarter growth

International Paper’s Industrial Packaging and Consumer Packaging segments recorded positive growth between the second and third quarters of 2011, but lost ground when compared against Q3 2010.
 
Industrial Packaging reported operating profit of US$293 million in the three months ended September 30, 2011, up from US$269 million in the previous quarter. Consumer Packaging turned a US$33 million loss in Q2 into a US$30 million profit in the most recent quarter. This compares to reported operating profits of US$332 million and US$71 million respectively in Q3 2010.

The 2011 figures include the impact of special items, which International Paper said are not factored in when measuring quarter-to-quarter results as its management focuses on business segment operating profits excluding those items.

Excluding special items, operating profit in Industrial Packaging was US$301 million in Q3 2011 against US$269 million in Q2, and US$103 million against US$98 million for Consumer Packaging.

On a quarter-to-quarter sequential basis, Industrial Packaging earnings were favorably impacted by lower mill maintenance outage spending and from resuming production at the Vicksburg mill following the May flood, International Paper said. North American sales volumes and prices were relatively stable in the third quarter, but were somewhat weaker in export markets reflecting seasonal declines in integrated EMEA box plants, as well as a slower than expected overall economic recovery. Higher recycled fiber costs had a US$14 million negative impact versus the second quarter of 2011.
 
International Paper said Consumer Packaging’s sequential improvement was primarily driven by the lack of maintenance outages and further sales price realizations in North America, but was partially offset by higher input costs.
 
Overall, quarterly net sales were US$6.6 billion compared with US$6.6 billion in the second quarter of 2011 and US$6.7 billion in the third quarter of 2010. Operating profit was US$571 million in the third quarter of 2011, compared with US$483 million in the second quarter and US$752 million in the third quarter of 2010, all of which included special items.
 
John Faraci (pictured, above), chairman and CEO of International Paper, said: ‘IP delivered a strong quarter in a tough environment. We are consistently generating higher profits and cash flow from our transformed portfolio with an international footprint that has strengthened our earnings power. Even as some expected challenges persisted in the third quarter, including weak economic growth in developed markets and input cost inflation, we look ahead with confidence as we continue to capitalize on our balanced portfolio and realize gains from recent investments.’