International Paper Company (NYSE:IP) Q1 2019 Earnings Conference Call Transcript

Apr 25, 2019 • 10:00 am ET


International Paper Company (NYSE:IP) Q1 2019 Earnings Conference Call Transcript


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Good morning. My name is Sarah, and I will be your conference operator today. At this time, I would like to welcome everyone to the First Quarter 2018 International Paper earnings calls. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. (Operator Instructions)

Thank you. Guillermo Gutierrez, you may begin.

Guillermo Gutierrez

Thank you, Sarah. Good morning, and thank you for joining International Paper's first quarter 2018 earnings conference call. Our key speakers this morning are Mark Sutton, Chairman and Chief Executive Officer, and Glenn Landau, Senior Vice President and Chief Financial Officer. There's important information at the beginning of our presentation that you should take time to read including certain legal disclaimers on slides two through seven.

For example, during this call, we will make forward-looking statements that are subject to risks and uncertainties, which are outlined on slide two of our presentation. We will also present certain non-US GAAP financial information.

As noted on slide three, a reconciliation of those figures to US GAAP financial measures is available on our website. Our website also contains copies of the first quarter 2018 press release and today's presentation slides. Relative to the Ilim joint venture and Graphic Packaging investments, slide four provides context around the financial information and statistical measures presented on those entities.

As indicated by the information on slides five through six, International Paper's proposal to acquire Smurfit Kappa is governed by the Irish Takeover Rules. Under Irish Takeover Rules, International Paper management is prohibited from discussing any material information or significant new opinion that has not been publicly announced. Any person interested in shares in International Paper or Smurfit Kappa is encouraged to consult his or her professional adviser.

With that, I will now turn the call over to Mark Sutton.

Mark S. Sutton

Thanks, Guillermo, and good morning, everyone. We'll begin the presentation on slide eight. International Paper delivered solid first quarter performance and strong year-over-year earnings growth. We continue to see healthy demand and solid fundamentals across our global businesses. Price realization momentum continues across all three of our businesses and we remain focused on delivering differentiated and innovative solutions to the right segments and the right customers.

Operationally, we executed well in a heavy maintenance outage quarter and managed through weather-related disruptions and other unusual events. We completed approximately 35% of our scheduled maintenance outages in the first quarter and we expect to have 75% of our total maintenance outages complete by the end of the second quarter.

Transportation and other input costs were a headwind in the quarter with higher wood, chemicals and energy, more than offsetting the lower recovered fibers or OCC cost. And on equity earnings, our Ilim joint venture in Russia delivered record performance.

Turning to the financial results on slide nine. Revenue increased by nearly 10% year-over-year, reflecting strong commercial performance and solid global demand. This includes record first quarter shipments of fluff and specialties in our Global Cellulose Fibers business.