IP earnings drop in response to pandemic in Q2
IP earnings drop in response to pandemic in Q2
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Memphis, Tennessee-based International Paper’s (IP’s) second-quarter earnings are down compared with the same time period in 2019.
According to the company’s earnings report, IP achieved second-quarter net earnings of $266 million compared with $141 million in the first quarter of the year and $292 million in the second quarter of 2019. The company reports that this year’s first-quarter net earnings included an after-tax charge of $337 million for the impairment of the net assets and write-off of foreign currency translation adjustment following the announcement of the sale of IP’s Brazil packaging business.
IP achieved second-quarter adjusted operating earnings of $305 million compared with $266 million in the first quarter of the year and $460 million in the second quarter of 2019.
In IP’s Industrial Packaging division, the company achieved $449 million in operating profits in the second quarter compared with $470 million in the first quarter of the year. In North America, IP reports that the division’s earnings were stable, reflecting seasonally lower export containerboard sales volumes and lower sales volumes for boxes as demand slowed from elevated levels in the first quarter as well as the impact of one less shipping day. Input costs were higher driven by recycled fiber costs. The volume and input cost earnings impact was mostly offset by strong operations and cost management, lower maintenance outage expenses and lower wood, energy and freight costs.
In Europe, IP’s second-quarter earnings decreased, driven by lower sales volumes due to the impacts of the COVID-19 pandemic in all regions and seasonality in Morocco, partially offset by improved margins reflecting a favorable product mix and favorable foreign currency impacts, primarily in Morocco.
The company’s Printing Papers division experienced losses in the second quarter as well. Printing Papers operating profits were down $11 million in the second quarter compared with $96 million in the first quarter of the year. In North America, this division’s earnings decreased significantly as a result of lower sales volumes and increased economic downtime reflecting the demand impact of the COVID-19 pandemic. However, the company says strong mill operations and cost management drove lower operating costs, and maintenance outage expenses were lower.
In Brazil, the Printing Papers division’s earnings decreased significantly due to lower sales volumes and economic downtime driven by the demand impacts of the COVID-19 pandemic and unfavorable foreign currency impacts, slightly offset by lower operating costs. In Europe and Russia, the division’s earnings were impacted by the COVID-19 pandemic, resulting in lower sales volumes and economic downtime. Maintenance outage expenses were higher in those regions, partially offset by lower operating costs in both regions.
“International Paper delivered solid earnings and generated strong cash from operations while navigating the COVID-19 pandemic and its significant economic impact,” says Mark Sutton, chairman and CEO of International Paper. “Our performance demonstrates the strength and resilience of our employees, our diverse customer base and our world-class manufacturing and supply chain capabilities. Looking ahead, we will continue to focus on cash generation to reinforce the company’s financial strength as we manage through ongoing uncertainty.”
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Source: Recycling Today
IP earnings drop in response to pandemic in Q2
<![CDATA[Memphis, Tennessee-based International Paper’s (IP’s) second-quarter earnings are down compared with the same time period in 2019. According to the company’s earnings report, IP achieved second-quarter net earnings of $266 million compared with $141 million in the first quarter of the year and $292 million in the second quarter of 2019. The company reports that this year’s first-quarter net earnings included an after-tax charge of $337 million for the impairment of the net assets and write-off of foreign currency translation adjustment following the announcement of the sale of IP’s Brazil packaging business.IP achieved second-quarter adjusted operating earnings of $305 million compared with $266 million in the first quarter of the year and $460 million in the second quarter of 2019. In IP’s Industrial Packaging division, the company achieved $449 million in operating profits in the second quarter compared with $470 million in the first quarter of the year. In North America, IP reports that the division’s earnings were stable, reflecting seasonally lower export containerboard sales volumes and lower sales volumes for boxes as demand slowed from elevated levels in the first quarter as well as the impact of one less shipping day. Input costs were higher driven by recycled fiber costs. The…