International Paper Reports Third Quarter 2024 Results

Core Insights - International Paper reported third quarter 2024 net earnings of $150 million, or $0.42 per diluted share, with adjusted operating earnings of $153 million, or $0.44 per diluted share, reflecting a decrease from the previous quarter and year [1][2][3] - The company generated $521 million in cash from operations and returned $161 million to shareholders in dividends, indicating strong operational cash flow despite lower earnings [1][3] - The CEO emphasized a focus on profitable growth and strategic resource alignment, including organizational restructuring and cost reductions, while exploring options for the Global Cellulose Fibers business [1][4] Financial Performance - Net sales for the third quarter 2024 were $4.686 billion, slightly down from $4.734 billion in the second quarter 2024 but up from $4.613 billion in the third quarter 2023 [3][4] - Adjusted operating earnings decreased to $153 million from $193 million in the second quarter 2024 and $224 million in the third quarter 2023 [2][3] - Free cash flow for the third quarter was $309 million, an increase from $240 million in the same quarter last year [3][16] Segment Performance - The Industrial Packaging segment reported net sales of $3.926 billion, with operating profit of $197 million, down from $291 million in the previous quarter [5][6] - The Global Cellulose Fibers segment saw an operating profit of $40 million, an improvement from $31 million in the second quarter 2024, driven by higher sales prices [6][7] - Corporate and inter-segment sales were $50 million, down from $86 million in the second quarter 2024 [5] Special Items and Adjustments - Net special items for the third quarter amounted to a net after-tax charge of $12 million, compared to a benefit of $297 million in the second quarter 2024 [7][11] - Restructuring charges included $56 million in severance costs related to the company's strategic realignment [7][11] - Adjusted operating earnings per share were $0.44, down from $0.55 in the second quarter 2024 and $0.64 in the third quarter 2023 [2][11] Future Outlook - The company anticipates closing the transaction with DS Smith in early 2025, which is expected to unlock substantial value [1][4] - Management is committed to reducing complexity and costs while enhancing competitive and strategic assets [1][4] - The focus remains on delivering sustainable packaging solutions and improving profitability amid challenging market conditions [1][4]