CORRECTED-(OFFICIAL)-UPDATE 5-International Paper CEO says feels good about 2012

Fri Apr 27, 2012 11:23am EDT

* Adj EPS 57 cents vs. Street forecast 50 cents

* Sales up nearly 5 percent to $6.66 billion; miss Street

* CEO says feels "very good about the rest of the year"

* Already saved $100 mln on freight after Temple deal - CEO

* Shares down slightly in morning trading

By Ernest Scheyder

April 27 (Reuters) - International Paper Co, which acquired rival packaging maker Temple-Inland Inc in February, posted a better-than-expected quarterly profit on strong sales of shipping boxes and paper.

The company, which operates around the world and became the largest North American producer of corrugated packaging in the buyout, said pockets of weakness remain -- especially in Europe -- but signs of recovery are emerging.

"I feel very good about the rest of the year," Chief Executive John Faraci said in an interview on Friday. "It's not a macro-bullish story. It's a macro-positive story."

North America is "sluggishly slow, but positive;" Europe likely will be in a "shallow" recession for the rest of the year; and China and India's economies are "slowing down a bit, but still have strong GDP growth," Faraci said.

For the first quarter, International Paper posted net income of $188 million, or 43 cents per share, compared with $281 million, or 65 cents per share, in the year-ago quarter.

Excluding restructuring charges and other one-time items, the company posted profit of 57 cents per share.

By that measure, analysts had expected earnings of 50 cents per share, according to Thomson Reuters I/B/E/S.

Revenue rose 4.6 percent to $6.66 billion. Analysts had expected $6.79 billion in revenue.

Sales of corrugated packaging boxes, which are primarily used for shipping by Amazon.com Inc and other customers, rose 22 percent to $3.12 billion.

Amazon's quarterly profit, announced late Thursday, widely beat Wall Street's expectations, a positive sign for IP. [ID:nL2E8FQHZE}

Sales of IP's printing papers rose 2 percent to $1.56 billion.

The company did see weakness in its distribution unit due to a drop in volume shipped. Sales in that unit fell 12 percent to $1.48 billion.

Shares of IP were down 0.3 percent to $33.66 in Friday morning trading. The stock has traded between $21.55 and $36.50 in the past 52 weeks.

TEMPLE BUYOUT

IP's $3.7 billion buyout of Temple in February -- seven months after the company's initial $3.3 billion offer was rejected -- came after a lengthy review by the U.S. Department of Justice.

When the deal closed, IP said it expected to save about $300 million over two years.

After six weeks, IP said it has identified $100 million in cost savings in its box plant operations.

About $20 million of that is for freight costs, IP said.

Elsewhere Friday, IP rival Weyerhaeuser Co posted a better-than-expected quarterly profit.

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