International Paper Beats Expectations but Takes a Step Back Anyway

Seth Jayson, The Motley Fool
Updated

International Paper (NYS: IP) reported earnings on April 27. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended March 31 (Q1), International Paper missed estimates on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue expanded and GAAP earnings per share dropped significantly.


Margins dropped across the board.

Revenue details
International Paper chalked up revenue of $6.66 billion. The eight analysts polled by S&P Capital IQ anticipated revenue of $6.90 billion on the same basis. GAAP reported sales were 4.2% higher than the prior-year quarter's $6.39 billion.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.57. The 14 earnings estimates compiled by S&P Capital IQ anticipated $0.51 per share. GAAP EPS of $0.43 for Q1 were 45% lower than the prior-year quarter's $0.78 per share.

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Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 25.1%, 250 basis points worse than the prior-year quarter. Operating margin was 6.1%, 260 basis points worse than the prior-year quarter. Net margin was 2.8%, 260 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $7.36 billion. On the bottom line, the average EPS estimate is $0.55.

Next year's average estimate for revenue is $29.01 billion. The average EPS estimate is $2.71.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 424 members out of 493 rating the stock outperform, and 69 members rating it underperform. Among 136 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 126 give International Paper a green thumbs-up, and 10 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on International Paper is outperform, with an average price target of $38.69.

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At the time thisarticle was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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