VOL. 129 | NO. 23 | Tuesday, February 4, 2014
International Paper Fourth-Quarter Earnings Nearly Double
By Bill Dries
(Daily News File/Lance Murphey)
Memphis-based International Paper posted lower-than-expected profits in fourth quarter 2013, in part from a write-down on the value of its xpedx distribution business.
But even with the $400 million write-down as xpedx merges with Unisource Worldwide Inc. this year and is spun off as a publicly traded company, IP’s earnings almost doubled.
International Paper showed net earnings of $436 million in the last three months of 2013 compared to $235 million in fourth quarter 2012.
The company attributed that to strong sales to online retailers, including Amazon. That sales category jumped more than 10 percent for the last three months, reflecting the holiday shopping season.
Balancing the xpedx write-down was a $651 tax benefit to IP for the quarter that comes with the closing of a federal tax audit.
For the year, International Paper posted net earnings of $1.4 billion compared to $794 million for 2012.
In an earnings call with analysts Tuesday, International Paper President and CEO John Faraci said the company finished 2013 “on a strong note,” with demand in the fourth quarter stronger than it was a year ago.
Faraci and other company executives also acknowledged that demand in China, Russia and Brazil is down.
IP’s biggest investments are in Brazil and Russia.
Faraci touted the company’s revenue growth “despite what I would call a challenging economic environment around the world.”
Unisource and International Paper announced last month they had reached a merger agreement that will create a publicly traded company led by executives of both companies. Xpedx president Mary Laschinger will become CEO of the new company, which will be based in Atlanta.
Faraci said he expected the deal to close this summer.
Meanwhile, International Paper executives told analysts that the company has shed most of the businesses related to its acquisition of Texas-based Temple-Inland Inc., a deal that was completed in February 2012.