third-quarter continuing-operations profit fell short of Wall Street's estimates, and the company said its earnings in the current three-month period will likely decline sequentially.
The company earned $201 million, or 42 cents a share, in the latest quarter, down from $1 billion and $2.03 a share in the year-ago period. Quarterly net sales fell to $5.87 billion, down slightly from $5.93 billion a year ago. The decrease reflects declining average prices for wood products and the sale of the U.S. coated-papers business.
Excluding items, International Paper would have had a profit of 39 cents a share, 4 cents short of estimates. Revenue was also a bit shy of the $5.94 billion consensus expectation. Last year, earnings were 27 cents before items.
"International Paper had a solid quarter in its platform businesses, driven by continued improved price realizations and strong operations in our North American paper and packaging businesses," Chairman and Chief Executive John Faraci said Thursday. "Volumes were solid for the third quarter, and distribution costs continue to be high. We lost money in wood products in the third quarter, reflecting a weaker housing market and excess capacity."
As for the fourth quarter, Faraci said volumes will be seasonally slower toward the end of the year.
"Through the end of the third quarter, for North America, we've realized most of our announced paper and packaging increases and believe we are near the bottom on wood-products pricing," he said. "Input costs will likely remain high, but we see some favorable signs on the horizon. In light of these factors, we expect earnings from continuing operations and before special items to be slightly lower than in third quarter."
On average, analysts are looking for a profit of 42 cents. Shares of International Paper were down 1.6% to $32.51.