posted a stronger-than-expected first quarter, overcoming persistently high raw-materials costs.
For its quarter ended last month, the Stamford, Conn., company earned $73 million, or 16 cents a share, up from the year-ago $73 million, or 15 cents a share. Latest-quarter earnings from continuing operations before special items were 34 cents a share, IP said, beating the Thomson First Call analyst consensus estimate by 3 cents.
Revenue rose to $6.6 billion from $6.1 billion a year earlier, beating the $6.57 billion Wall Street target. But operating profit dropped to $551 million from $583 million in the fourth quarter, as higher average prices in printing papers and wood products was offset by higher input costs and lower volumes.
"Business conditions in North America were seasonally slow in January and February and started to improve in mid-March. Volumes in Europe and Brazil were also down vs. the fourth quarter. Despite this, we realized the highest first-quarter sales revenues in four years, due to better pricing across our businesses in North America," said CEO John Faraci. "During the quarter, we took downtime at some of our mills to balance our production with customer demand, and our mills performed exceptionally well around the world. Operating margins continue to be negatively impacted by higher raw material costs, primarily for wood, energy and chemicals."
IP said it expects the second quarter to be "somewhat seasonally stronger than the first quarter," but the company added that raw material costs "remain at high levels and continue to impact our profit margins."
IP closed Thursday at $34.30.