International Paper Falls After Net Income Declines on Costs to Close Mill
July 28 (Bloomberg) -- John Faraci, chief executive officer of International Paper Co., talks about the macroeconomic environment, product demand and pricing. International Paper said second-quarter profit fell 32 percent because of a charge to close a mill and as year-ago tax-credit gains weren’t repeated. Profit excluding the one-time items was 42 cents a share. Analysts projected 41 cents, the average of 14 estimates in a Bloomberg survey. Faraci talks with Margaret Brennan on Bloomberg Television's "InBusiness." (Source: Bloomberg)
International Paper Co., the world’s largest pulp-and-paper producer, dropped the most in a month in New York after it said second-quarter profit fell 32 percent because of a charge to close a mill and as year-ago tax-credit gains weren’t repeated.
International Paper fell $1.37, or 5.4 percent, to $24.12 at 4:15 a.m. in New York Stock Exchange composite trading, the biggest percentage drop since June 29. The shares have declined 9.9 percent this year.
Net income dropped to $93 million, or 21 cents a share, from $136 million, or 32 cents, a year earlier, Memphis, Tennessee-based International Paper said today in a statement. Sales rose 5.5 percent to $6.12 billion.
The company’s earnings were affected by $68 million in costs associated with the closing of the company’s mill in Franklin, Virginia. A year ago, International Paper profit was buoyed by a U.S. government tax-credit program to encourage the use of non-fossil fuels such as black-liquor, a pulp residue.
Profit excluding the one-time items in the current quarter was 42 cents a share. Analysts projected 41 cents, the average of 14 estimates in a Bloomberg survey.
Chief Executive Officer John Faraci said a slowdown in the pace of U.S. economic growth that the company detected in May and June is extending into the current quarter.
“The economy is growing, no doubt about it, we are out of the recession,” Faraci said today in an interview on Bloomberg Television’s InBusiness with Margaret Brennan. “We just see growth in the third quarter not as robust or as strong as the second quarter because there was some inventory building.
“I think all the macro signs show that things are slowing, but they’re still positive,” he said. “We’re seeing a bit of a slowdown in the rate of orders.
To contact the reporter on this story: Christopher Donville in Vancouver at cjdonville@bloomberg.net.
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