Will Lower Prices Hurt International Paper's (IP) Q2 Earnings?

Core Viewpoint - International Paper Company (IP) is expected to report second-quarter 2024 results on July 24, with a consensus estimate for revenues at $4.76 billion, reflecting a 1.7$4.76 billion, showing a 1.7% increase from the previous year [1]. - The consensus estimate for earnings is 40 cents per share, with a notable 11% decrease in estimates over the past 60 days, reflecting a year-over-year decline of 32.2% [1][2]. Earnings Surprise History - International Paper has beaten the Zacks Consensus Estimates in three of the last four quarters, with an average surprise of 10.9% [3]. Earnings Prediction Model - The model indicates a potential earnings beat for International Paper, supported by a positive Earnings ESP of +2.53% and a Zacks Rank of 1 (Strong Buy) [5][6]. Factors Influencing Q2 Performance - Despite a decline in demand throughout most of 2023, there has been a recent uptick in demand, particularly in the e-commerce sector, which is expected to positively impact second-quarter results [7]. - Projected volumes for the Industrial Packaging segment are 4,029 thousand short tons, indicating a 2.2% year-over-year growth, while containerboard volumes are expected to reach 741 thousand short tons, reflecting a 23.5% increase [7]. Segment Performance Insights - The Industrial Packaging segment is anticipated to see a year-over-year volume increase in Saturated Kraft (7.9%) and EMEA Packaging (1.1%), but declines in Gypsum/Release Kraft (4.7%) and corrugating packaging volumes (2.8%) may offset these gains [8]. - Average realized pricing for the Industrial Packaging segment is expected to decline by 3% year-over-year, leading to a projected revenue decrease of 0.9% to $3.84 billion [8]. - The Global Cellulose Fibers segment is expected to maintain stable volumes at 729 thousand metric tons, with a 16.6% year-over-year rise, but pricing is projected to decline by 13.5% [9]. Price Performance - International Paper's shares have increased by 52.7% over the past year, outperforming the industry growth of 42.5% [10].