International Paper (IP), one of the world’s leading companies in pulp and packaging production, released its financial results for the third quarter of 2024 on Thursday, the 31st. The company reported a net income of US$150 million, equivalent to US$0.42 per diluted share. Adjusted operating earnings (non-GAAP) stood at US$153 million, or US$0.44 per diluted share. Additionally, operations generated US$521 million in cash, with US$161 million returned to shareholders through dividends.
The Global Cellulose Fibers segment recorded operating earnings of US$40 million, an improvement from US$31 million in the previous quarter. This growth was driven by higher prices for fluff pulp. However, operating costs increased due to reliability issues at the mill, employee benefits expenses, and the spending schedule. Input costs remained stable as lower energy and chemical prices were offset by higher wood costs.
“Our third quarter earnings are above our outlook”, said President and CEO Andy Silvernail. “ We are deploying an 80/20 approach to strategically align resources to become excellent with our customers, while reducing complexity and cost across the company”, he emphasized. He also mentioned organizational restructuring and facility closures as measures to reduce operating costs, alongside exploring strategic options for the Global Cellulose Fibers business.
In the Industrial Packaging segment, the company posted operating earnings of US$197 million, compared to US$291 million in the second quarter of 2024. In North America, the decline was attributed to seasonally lower volumes, high operating costs, and expenses related to planned shutdowns. Energy and wood costs pressured results, although the company received an insurance reimbursement related to the fire at the Ixtac plant in Mexico, which occurred in the first quarter of 2024.
“As we look forward to the combination with DS Smith, we expect the transaction will close early in the first quarter of 2025. Overall, I’m confident that our transformational journey will unlock substantial value at IP and strengthen the company for our employees, customers and shareholders”, stated Silvernail.
The performance of the EMEA Packaging segment was affected by lower volumes and high input costs, though there was relief in operating costs and planned shutdowns. “Higher prices across the portfolio, including benefits from our packaging go-to-market strategy were supported by a moderately improving box demand environment. We also had higher operating costs and lower volumes due to seasonality and commercial actions to improve profitability”, added the CEO.
