International Paper reported second-quarter 2012 net earnings attributable to common shareholders totaling $134 million ($0.31 per share) compared with net earnings of $188 million ($0.43 per share) in the first quarter of 2012 and $219 million ($0.51 per share) in the second quarter of 2011. Amounts in all periods include the impact of special items.
Earnings from continuing operations and before special items in the second quarter of 2012 totaled $203 million ($0.46 per share), compared with $247 million ($0.57 per share) in the first quarter of 2012 and $338 million ($0.79 per share) in the second quarter of 2011. Earnings from continuing operations and before special items were impacted by seasonally peak maintenance outage expenses and an unfavorable non-cash foreign exchange swing at our Ilim joint venture in Russia. Partially offsetting these items were Temple-Inland integration benefits and synergies tracking ahead of plan as well as modest improvements in costs and pricing.
Quarterly net sales were $7.1 billion compared with $6.7 billion in the first quarter of 2012 and $6.6 billion in the second quarter of 2011.
Operating profits were $426 million in the second quarter of 2012, down from $462 million in the first quarter of 2012, both of which included special items.
“I’m very encouraged by the speed of the integration efforts related to the Temple-Inland acquisition, as well as the successful start-up of our Franklin, Virginia fluff pulp facility,” said John Faraci, Chairman and Chief Executive Officer. “Despite continued slow growth in North America, uneven global demand and currency headwinds primarily at our Ilim joint venture, we managed to turn in a solid quarter. Looking forward to the third quarter, our strong balanced portfolio is positioned to perform well in this environment.”
To measure the performance of the company’s business segments from quarter to quarter without variations caused by special items, management focuses on business segment operating profits excluding those items. Second quarter 2012 segment operating profits and business trends, excluding special items, compared with the prior quarter are as follows:
Industrial Packaging operating profit was $367 million ($260 million including special items) compared with an operating profit of $278 million ($215 million including special items) in the first quarter of 2012. Strong results were driven by full quarter Temple-Inland base earnings and incremental synergies, seasonal volume and mix improvements, excellent operations and the pass through of export price increases.
Printing Papers operating profit was $106 million ($104 million including special items) compared with an operating profit of $145 million ($146 million including special items) in the first quarter of 2012. Significantly higher planned maintenance outages in the quarter were partially offset by successful price increases in Brazil and Russia as well as improved price realizations on U.S. exports.
Consumer Packaging operating profit was $63 million ($57 million including special items) compared with an operating profit of $96 million ($103 million including special items) in the first quarter of 2012. The quarter was impacted by higher costs largely attributable to higher annual maintenance expenses and continued soft business conditions. The Foodservice business had a strong quarter, driven by seasonality and continued growth in new product lines.