International Paper (IP) reported Q3 2024 financial results. Q3 2024 net sales up 1.6% to $4.69 billion, compared to $4.61 billion in the Q3 2023. Net earnings were $150 million ($0.42 per diluted share).
Industrial Packaging business segment operating profit (loss) in the Q3 2024 was $197 million compared with $291 million in the Q2 2024. In North America, business segment operating profit (loss) decreased as higher sales prices for boxes and containerboard were more than offset by seasonally lower sales volumes, higher operating costs and higher planned outage costs. Sales volumes were also impacted by one less shipping day in the Q3 2024. Operating costs were negatively impacted by lower volumes, reliability incidents and spending, seasonally higher labor and employee benefit costs. Input costs were higher, driven by higher energy and wood costs. Business segment operating profit (loss) benefited from the receipt of an insurance reimbursement related to the Ixtac, Mexico box plant fire that occurred in the Q1 2024. In EMEA Packaging, business segment operating profit (loss) was lower driven by seasonally lower volumes and higher input costs partially offset by lower planned outage costs and operating costs.
Global Cellulose Fibers business segment operating profit (loss) in the Q3 2024 was $40 million compared with $31 million in the Q2 2024. The improvement of business segment operating profit (loss) reflected higher average sales prices for both fluff and paper and tissue grade pulp and lower planned outage costs. Lower sales volumes for commodity pulp were mostly offset by higher fluff pulp volume. Operating costs were higher, driven by mill reliability incidents, employee benefits costs and the timing of spending. Input costs were stable as lower energy and chemical costs were offset by higher wood costs.
"Our Q3 earnings are above our outlook," said Chairman and CEO Andy Silvernail. "Higher prices across the portfolio, including benefits from our packaging go-to-market strategy were supported by a moderately improving box demand environment. We also had higher operating costs and lower volumes due to seasonality and commercial actions to improve profitability."
"Going forward, we are laser-focused on delivering profitable growth as the low-cost, most reliable and innovative sustainable packaging solutions provider for our customers. We are deploying an 80/20 approach to strategically align resources to become excellent with our customers, while reducing complexity and cost across the company. This includes organizational restructuring and corporate cost reductions, as well as investments to strengthen our most competitive and strategic assets, paired with facility closures to structurally reduce operating costs. In addition, we are exploring strategic options for our Global Cellulose Fibers business. We recognize the impact of these difficult decisions and are providing support for team members who are affected," Silvernail added. "As we look forward to the combination with DS Smith, we expect the transaction will close early in the Q1 2025. Overall, I'm confident that our transformational journey will unlock substantial value at IP and strengthen the company for our employees, customers and shareholders."
