Feb 4 International Paper Co, the largest
North American producer of corrugated shipping boxes, posted a
lower-than-expected quarterly profit on Tuesday due in part to
write-downs and pension costs.
The company spent more than $400 million in the fourth
quarter to write down the value of its xpedx distribution
business, which is being combined with Bain Capital-backed
Unisource Worldwide Inc and is expected to be spun off as a
publicly traded company this year.
"These write downs will make xpedx a more competitive
business going forward," IP Chief Executive John Faraci said in
Overall, earnings nearly doubled, helped largely by strong
sales to Amazon.com Inc and other online retailers.
Online retail sales, a small but fast-growing part of the
company's revenue base, jumped more than 10 percent in the
period, helped by a near-record holiday season for Internet
shopping. Amazon's fourth-quarter sales, for instance, jumped 20
"Demand in the fourth quarter was better than it was in the
fourth quarter of 2012," Faraci said. "We finished the year on a
For the quarter, the company posted net income of $436
million, or 98 cents per share, up from $235 million, or 53
cents per share, in the same period a year ago.
Excluding the distribution and pension charges, which
together cost roughly 36 cents per share, and other one-time
items, the company posted profit of 83 cents per share.
By that measure, analysts expected earnings of 87 cents per
share, according to Thomson Reuters I/B/E/S.
Revenue rose 2.5 percent to $7.25 billion from the year-ago
Analysts expected revenue of $7.38 billion.
Demand from China, Russia, Brazil and other emerging
economies has cooled somewhat, Faraci said, prompting the
company to focus closely on operations there.
"We've got good businesses in all those markets," Faraci
said. "But we're running the businesses aggressively, managing
pricing and being careful about reinvestment. There's plenty of
capacity in those markets."
Shares of Memphis-based IP have gained nearly 9 percent in
the past 52 weeks to close Monday at $46.06.