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Last $54.05 USD
Change Today -0.62 / -1.13%
Volume 3.6M
IP On Other Exchanges
Symbol
Exchange
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Mexico
As of 8:04 PM 04/17/15 All times are local (Market data is delayed by at least 15 minutes).

international paper co (IP) Key Developments

International Paper Reportedly Eyeing Smurfit

A US paper-manufacturing giant is weighing a £6 billion-plus takeover bid for Smurfit Kappa Group plc (ISE:SK3). Sky News has learnt that International Paper Company (NYSE:IP) is working with advisers at Deutsche Bank on a possible bid for Dublin-listed Smurfit, which specialises in the production of corrugated packaging. Sources cautioned this weekend, however, that no formal approach had yet been made to Smurfit's board by International Paper, adding that the prospective bidder may yet decide not to pursue a deal.

International Paper Plans to Invest $135 Million to Expand Fluff Pulp Production at its Riegelwood N.C. Mill

International Paper announced plans to invest $135 million to expand fluff pulp production at its Riegelwood N.C. Mill. The investment will convert the mill to 100% fluff and softwood pulp production, adding an incremental 400,000 tons of capacity, with ongoing flexibility to shift between the two products. When the conversion is complete, the company will have the capability to produce up to 1.4 million tons annually of high-quality fluff. The new fluff pulp capacity is expected to ramp up mid-year 2016. As a result of the Riegelwood Mill conversion to 100% fluff and softwood pulp, the company will reduce its coated paperboard capacity by 350,000 tons, sell the Carolina® brand to MeadWestvaco (MWV), and focus the business on supplying customer demand in the food service and packaging markets. The sale of the Carolina business, which represents the majority of the coated paperboard volume reduction, is expected to close April 30, 2015. Terms of the sale were not disclosed. Carolina is a premier coated bristols brand used in a variety of applications including greeting cards, book covers and marketing collateral. The sale captures the brand's value, supports International Paper's plans to expand fluff pulp production at Riegelwood and streamlines and strengthens its coated paperboard business.

International Paper Company Elects William J. Burns to its Board of Directors

International Paper Company announced the election of Ambassador William J. Burns to its Board of Directors effective February 11, 2015. Ambassador Burns, age 58, is President of the Carnegie Endowment for International Peace. Ambassador Burns served in the U.S. Department of State as Deputy Secretary of State from 2011 to 2014, as Under Secretary for Political Affairs from 2008 to 2011, and as Ambassador to Russia from 2005 to 2008, among many other posts during his 33 years in the Foreign Service.

International Paper Co. to Close Recycling Plants in Memphis and Denver

International Paper Co. will close recycling plants in Memphis and Denver, a move that will affect 25 local employees. International Paper used the Memphis facility to sort paper and cardboard products, which were bundled into bales and sent to mills. The used paper went through a process that reduced it to pulp to make new products.

International Paper Company Reports Unaudited Consolidated Earnings Results for the Fourth Quarter and Full Year Ended December 31, 2014; Provides Earnings Guidance for 2015

International Paper Company reported unaudited consolidated earnings results for the fourth quarter and full year ended December 31, 2014. For the quarter, the company reported earnings from continuing operations before income taxes of $307 million against $239 million for the same period a year ago. Earnings from continuing operations of $137 million or $0.34 diluted per share against $789 million or $1.78 diluted per share for the same period a year ago. Net earnings of $128 million or $0.32 diluted per share against $430 million or $0.98 diluted per share for the same period a year ago. Net earnings attributable to International Paper Company were $134 million against $436 million for the same period a year ago. Net Sales were $5,943 million against $5,848 million for the same period a year ago. The company reported $739 million of free cash flow. And this came from solid performance across all key businesses as well as strong working capital management in the quarter. The company benefited from stronger North American box demand, but this was muted by weaker global conditions in a number of segments. The company did see some benefits from lower input costs in the quarter and operating results at the Ilim JV were strong, although, the JV did experience a large noncash FX charge of $0.40 in the quarter itself and this reduced fourth quarter EPS to $0.53 per share. For the year, the company reported earnings from continuing operations before income taxes of $872 million against $1,228 million for the same period a year ago. Earnings from continuing operations of $549 million or $1.31 diluted per share against $1,687 million or $3.80 diluted per share for the same period a year ago. Net earnings of $536 million or $1.29 diluted per share against $1,378 million or $3.11 diluted per share for the same period a year ago. Net earnings attributable to International Paper Company were $555 million against $1,395 million for the same period a year ago. Net Sales were $23,617 million against $23,483 million for the same period a year ago. Net cash provided by operating activities of $3,077 million against $3,028 million for the same period a year ago. The company delivered record cash flow from operations of $3.4 billion, along with free cash flow of $2.1 billion. Full year earnings per share finished at $3 per share and included in this figure is $0.63 of Ilim FX negative impact. Absent this impact, EPS was up 20% year-over-year. Beyond strong earnings from the businesses, cash flow performance in 2014 benefited from strong working capital management in the fourth quarter. The company had a significant noncash Ilim FX hit in 2014, of $0.63 per share. But most importantly, the company saw a substantial improvement in the business and the operations, and this is attributable to the continued postproject ramp-up as well as other efficiency improvements and margin expansion that resulted in operational EBITDA more than doubling from the prior year. The company expects the tax rate to increase modestly to 33% on higher U.S. earnings and the absence of tax extenders, which it saw in the fourth quarter of 2014. The company sees the opportunity to grow EBITDA by roughly 5% by executing the plans it currently has in place for key businesses. Along with this expected increase in EBITDA, free cash flow is likely to be impacted by things like higher cash taxes as a result of higher earnings from the U.S. operations, also as a result of changing and lower tax credits and a few nonrepeat deductible events. CapEx target for 2015 is $1.5 billion.

 

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Valuation IP Industry Range
Price/Earnings 41.1x
Price/Sales 1.0x
Price/Book 4.4x
Price/Cash Flow 11.7x
TEV/Sales 0.4x
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