International Paper (NYSE: IP) has disclosed its financial results for the first quarter of 2024, evidencing a marginal rise in net sales and a significant rebound in net earnings compared to the previous quarter. For the first quarter of 2024, the company reported net sales of $4,619 million, a slight increase from $4,601 million in the fourth quarter of 2023, yet below the $5,020 million registered in the first quarter of 2023.
The net earnings for the first quarter of 2024 stood at $56 million, marking a substantial recovery from a loss of $284 million in the fourth quarter of 2023. This improvement contrasts with the $172 million in net earnings achieved in the first quarter of the previous year. This recovery is notable, reflecting the company's resilience in navigating operational challenges including a January freeze and a significant fire at its Ixtac facility in Mexico, which together impacted the quarter negatively by approximately $52 million pre-tax.
Mark Sutton, Chairman and CEO of International Paper, highlighted the strategic progress made during the quarter, noting the benefits from business strategies and mill system optimization. However, he acknowledged the challenges of elevated costs and seasonally lower volumes, while remaining optimistic about improving market trends.
Looking forward, Sutton expressed confidence in the leadership transition set for May 1, when Andy Silvernail will assume the CEO role. Sutton, who is retiring after a 40-year tenure with the company, praised Silvernail's leadership capabilities and the expertise of the senior leadership team.
In its industrial packaging segment, International Paper reported first quarter operating profits of $216 million, down from $315 million in the previous quarter. The decrease was due to seasonally lower volumes, higher planned outage costs, and increased input costs, particularly for recovered fiber. However, higher sales prices for boxes and containerboard in North America, driven by commercial efforts, offset some of the losses.
The company's global cellulose fibers segment saw operating losses narrow to $(47) million from $(58) million in the previous quarter, thanks to higher pulp pricing, improved product mix, and lower outage costs. Despite these gains, higher operating costs remained a challenge. Regional demand for absorbent fluff products showed signs of improvement in mature economies, while remaining stable in developing regions.
