Memphis-based International Paper Co. showed a net loss of $95 million for the first quarter of 2014, the company reported Wednesday, April 30.
Memphs-based International Paper Co. reported Wednesday a $95 million net loss for the first quarter.
(Daily News File/Lance Murphey)
John Faraci, chairman and chief executive officer of International Paper, attributed the loss, which comes to 21 cents per share of common stock, to severe weather affecting North American operations and an “uneven environment” elsewhere.
“Despite the severe weather that impacted our North American businesses, International Paper delivered solid results,” Faraci said during a Wednesday earnings call with analysts and investors. “North America and Western Europe demand is slowly improving, while emerging market growth has slowed in this uneven environment. We remain intensely focused on IP initiatives that will allow us to expand margins and continue to generate free cash flow in 2014.”
The first-quarter loss included a $495 million pre-tax charge for the shutdown of IP’s mill in Courtland, Ala., which was expected.
The $95 million loss compares with net earnings of $318 million in the first quarter of 2013. Net earnings in the last quarter of 2013 were $436 million.
International Paper’s net sales for the quarter were $7 billion, compared with $7.1 billion a year ago. Net sales in the fourth quarter of 2013 were $7.2 billion.
Faraci termed the earnings for the first quarter solid “despite the unusual combination of multiple severe weather events.” The company estimates the impact of the weather on operations was $60 million.
That was offset by higher prices in North America as well as higher paper prices in Latin America, particularly in Brazil.
The first quarter also reflects other elements of the company’s reorganization.
The closing of the Courtland mill is the latest part of that, and Faraci said there will likely be another charge to come. He described the closure as in its final stages, with the first-quarter charge reflecting a “big chunk” of the charges, but not all of them.
The company also expects to close on the merger spinoff of xpedx, its commercial printing-distribution business, around the middle of this calendar year, according to Faraci.
For the quarter, xpedx reported operating profits of $7 million, compared with a $5 million loss in the fourth quarter of 2013.
International Paper Co. and Unisource Worldwide Inc. of Atlanta announced in January they had reached an agreement to merge xpedx with Unisource. The resulting publicly traded company is to be based in Atlanta, with 51 percent of shares in the new entity to be owned by International Paper shareholders.
International Paper’s Ilim Joint Venture in Russia remained in its ramp-up period in the first quarter, posting an equity loss of $31 million, compared with an equity loss of $12 million in the previous quarter.
Faraci also said a devaluation of the Russian ruble against Ilim’s denominated debt, which is in U.S. dollars.
The devaluation masked what was a solid quarter for the joint venture, he added.