Operating Earnings were $292 million in the 1Q 2013, compared with $305 million in the 4Q 2012 and $272 million in the 1Q 2012.
Quarterly net sales were $7.1 billion compared with $7.1 billion in the 4Q 2012 and $6.7 billion in the 1Q 2012.
Business segment operating profits before special items in the 1Q 2013 were $571 million, compared with $565 million in the 4Q 2012 and $538 million in the 1Q 2012.
"Industrial Packaging posted solid results driven by improved pricing and synergies, however, the company's overall performance in the quarter was muted by seasonally slow demand across our global operations, weak earnings from xpedx and an unfavorable foreign exchange swing at Ilim," said John Faraci, Chairman and CEO. "Looking ahead, peak annual maintenance outage spending and expansion project ramp-up costs at Ilim will impact the 2Q. Earnings runway from our strategic projects and announced pricing initiatives will position the company to deliver step-change financial performance in the second half of 2013, regardless of what looks to be a continued slow and uneven global economy."
Industrial Packaging segment posted operating profits of $369 million ($355 million including special items) in the 1Q 2013, compared to $368 million ($336 million including special items) in the 4Q 2012.
In North America, higher selling prices for boxes and containerboard were partially offset by seasonally slow demand, higher input costs and $16 million in incremental scheduled outage expenses. 1Q segment results include consolidated earnings for Orsa International Paper Embalagens S.A. for the period January 15 through February 28, 2013.
Printing Papers segment's operating profits were $149 million (before and after special items) compared to $147 million (before and after special items) in the 4Q 2012.
Consumer Packaging segment's operating profit was $51 million ($7 million including special items), compared with $39 million ($41 million including special items) in the 4Q 2012. Lower scheduled maintenance expenses in North America were partially offset by higher operating costs primarily related to an unplanned reliability issue in January on the digester at the Augusta, GA coated paperboard mill.
xpedx, the company's North American distribution business, reported operating profits of $2 million (a loss of $5 million including special items), compared with $11 million ($4 million including special items) in the 4Q 2012. Seasonally slow demand, weaker margins and declining commercial printing and publishing volumes impacted earnings in the quarter.
International Paper recorded Ilim Joint Venture equity losses of $11 million, compared with equity earnings of $8 million in the 4Q 2012. Based on a stronger dollar versus the ruble, the after-tax impact of a foreign exchange loss in the 1Q 2013 was $11 million unfavorable compared with a foreign exchange gain of $6 million in the 4Q 2012. The impact in both quarters was due to non-cash adjustments associated with the Ilim Group joint venture's U.S. dollar-denominated debt.
International Paper is a global leader in packaging and paper with manufacturing operations in North America, Europe, Latin America, Russia, Asia and North Africa. Its businesses include industrial and consumer packaging and uncoated papers, complemented by xpedx, the company's North American distribution company.