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In 2Q16, $IP's Consumer Packaging business experienced an improved quarter driven by good operations, effective cost management and the lack of maintenance outages. In Printing Papers, earnings improved due to lower outage costs associated with Riegelwood. The Ilim JV saw volume growth of almost 5% YoverY.
Paper products company $IP reported 37% drop in its 1Q17 earnings to $209MM, or $0.50 per share, compared to $334MM, or $0.81 per share during 1Q16. The results were impacted by pre-tax charge of $14MM. Net sales rose to $5.5Bil from $5.1Bil, helped by pulp business that was acquired in late 2016.
For 2017, $IP expects CapEx to be higher at around $1.5Bil, including the expanded cellulose fibers business. Depreciation expense is also expected to be up to roughly $1.4Bil. The company expects higher earnings in North American Industrial Packaging business.
$IP reported that there was a structural damage in Pensacola mill's largest digester (a large pressurized vessel) and power house on Jan. 22, 2017. No injury was recorded. Earlier this week, the power house was restarted and operations were resumed partially. At this point, $IP expects the total impact from this incident to be in excess of $50MM.
In Global Cellulose Fibers segment, $IP's newly formed segment, the company expects both favorable and timing related unfavorable items in 2017. $IP expects a run rate of $100MM in synergies by the end of 2017 adding approx. $50MM to earnings for 2017. One time costs are expected to be around $85MM.
$KBR received a contract for maintenance, planning and industrial services from $IP, a global producer of renewable packaging and paper products. The contract will be performed over the next four years. $KBR will provide industrial maintenance services of around 700,000 labor hours at $IP's offices in Svetogorsk, Russia.
$WY completed sale of its Cellulose Fibers pulp mills to $IP for $2.2Bil in cash. $WY expects to use substantial portion of $1.6Bil after-tax proceeds for repayment of debt. Earlier this year, $WU closed sale of its liquid packaging board business to Nippon Paper Industries and sale of its publishing papers business to One Rock Capital Partners.
$IP said the volume QoverQ in Consumer Packaging was about flat in 3Q16. The company is seeing a slight uptick in food service in terms of shipments and bookings. The in-store traffic with food service and single-serve retail has been a slight headwind in 2016 for some retailers but overall, $IP performed well in this segment.
$IP expects volume to be lower in 4Q16 due to four less shipping days in the North American corrugated packaging business. This is expected to negatively impact North American packaging business results by about $50MM. The company expects seasonally stronger volume in the Brazil papers business and seasonal demand improvement in EMEA packaging.
The BoD of $IP approved a 5% increase to the annual dividend during 3Q16, moving it to $1.85 per share. The company also continues to work towards being prepared to close the acquisition of the Weyerhaeuser pulp business in 4Q16. $IP received approvals from the European Union and Brazil with regards to the transaction.
During 3Q16, results in $IP’s North American Industrial Packaging business were significantly affected by rising input costs which negatively impacted earnings by $36MM QoverQ, along with a slightly less favorable mix and modest price erosion which impacted margins slightly.
In the Industrial Packaging segment, $IP posted operating profits of $424MM in 3Q16. Printing Papers operating profits were $128MM and Consumer Packaging operating profits were $61MM in 3Q16. International Paper recorded Ilim joint venture equity earnings of $46MM during 3Q16.
Paper and packaging company $IP reported an increase in 3Q16 earnings. Net earnings were $312MM or $0.75 per share compared to $220MM or $0.53 per share in 3Q15. Net sales fell to $5.3Bil in 3Q16 from $5.7Bil in 3Q15, primarily due to the sales of the IP-Sun JV and the Asian Corrugated Packaging and Carolina Coated Bristols businesses.
$WY said on Aug. 4, 2016 it received Hart-Scott-Rodino clearance in the US for the announced sale of its pulp mills to $IP. The company continues to make progress with remaining regulatory approvals, mainly competition clearance in several foreign jurisdictions. $WY anticipates closing the transaction in 4Q16.