International Paper profit nearly doubles on price hikes
(Reuters) - International Paper Co (IP.N), the largest provider of shipping boxes for Amazon.com Inc (AMZN.O) and other giant e-commerce companies, posted a better-than-expected quarterly profit on Thursday, helped by price hikes in its biggest unit.
IP, which makes shipping boxes as well as boxes for consumer goods such as medicines and cigarettes, said it expected results would only improve later this year as it becomes more efficient and takes market share.
"Even in a slow-growth economic environment we can improve our performance," Faraci said. "We think there's going to be a significant improvement in earnings and free cash flow based on earnings momentum coming out of the second quarter."
Given the company's strong sales, Faraci said IP could raise its quarterly dividend, currently 30 cents.
"I view our dividend as having a lot of upside," he said, noting the company's board will meet to consider an increase later in the year.
Shares of the Memphis-based company rose 1.7 percent to $48 in premarket trading.
IP, which bought smaller rival Temple-Inland IPTIN.UL last year, said it was able to successfully raise prices for corrugated packaging -- its largest unit -- and still increase sales, a sign that demand is high and customers are willing to pay more.
IP reported net income of $259 million, or 57 cents per share, compared with $134 million, or 31 cents per share, in the year-earlier period.
Excluding a payout to the company's pension fund and other one-time items, International Paper earned 64 cents per share.
By that measure, analysts expected earnings of 56 cents per share, according to Thomson Reuters I/B/E/S.
Revenue rose 4 percent to $7.34 billion. Analysts expected $7.42 billion in revenue.
(Reporting by Ernest Scheyder; Editing by Gerald E. McCormick and Sofina Mirza-Reid)