Feb 4 (Reuters) - 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 an interview.
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 percent.
“Demand in the fourth quarter was better than it was in the fourth quarter of 2012,” Faraci said. “We finished the year on a strong note.”
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 period.
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.