International Paper (NYSE: IP) today reported full-year 2014 net earnings attributable to common shareholders totaling $555 million ($1.29 per share) compared with $1.4 billion ($3.11 per share) in full-year 2013.In the fourth quarter 2014, the Company reported net earnings of $134 million ($0.32 per share) compared with $436 million ($0.98 per share) in the fourth quarter of 2013. Fourth quarter 2014 earnings included a $0.40 per share non-cash foreign exchange charge as described below. Amounts in all periods include the impact of special items, non-operating pension expense and discontinued operations.
Full-year 2014 Operating Earnings were $1.3 billion ($3.00 per share) compared with $1.4 billion ($3.06 per share) in 2013. Operating Earnings in the fourth quarter of 2014 totaled $227 million ($0.53 per share) compared with $359 million ($0.81 per share) in the fourth quarter of 2013.
Annual sales totaled $23.6 billion in 2014 compared with $23.5 billion in 2013. Quarterly net sales were $5.9 billion in the fourth quarter of 2014 compared with $5.8 billion in the fourth quarter of 2013.
Full-year 2014 business segment operating profits were $2.8 billion compared with $2.6 billion in 2013. Business segment operating profits in the fourth quarter of 2014 were $694 million, compared with $661 million in the fourth quarter of 2014.
“International Paper delivered record cash from operations through strong performance by the North American Industrial Packaging group,” said Mark Sutton , Chairman and Chief Executive Officer. “As we enter 2015, a strengthening North American economy is helping to offset a global environment that remains challenged. With our focus on execution, IP expects to deliver another year of earnings growth and strong free cash flow.”
The performance of the Company’s business segments are measured quarter to quarter without variations caused by special items, as management focuses on business segment operating profits excluding those items. Fourth quarter 2014 business segment operating profits and business trends compared with the prior quarter are as follows:
Industrial Packaging operating profits in the fourth quarter of 2014 were $484 million ($379 million including special items) compared with $569 million ($527 million including special items) in the third quarter of 2014. The earnings decrease was largely due to higher planned maintenance outage expenses, lower export prices and higher operating expenses. North America’s box business ended the quarter with the strongest seasonal demand since 2010.
Printing Papers operating profits were $155 million ($148 million including special items) in the fourth quarter of 2014 versus $192 million ($177 million including special items) in the third quarter of 2014. In the U.S., the earnings decrease was primarily driven by higher annual maintenance outage expenses for paper, while pulp earnings benefited from fewer annual maintenance outages. In Brazil, volume and mix improved quarter over quarter reflecting seasonal improvements, but were more than offset by higher operating and maintenance outage expenses. In Europe, despite challenging market conditions, volumes were higher. Europe’s results were additionally impacted by higher costs.
Consumer Packaging operating profits were $55 million ($51 million including special items) in the fourth quarter of 2014 compared with $79 million ($77 million including special items) in the third quarter of 2014. North American coated paperboard earnings decreased due to lower sales volume and higher planned annual maintenance spending, which was partially offset by improved input costs. Revenue and volume for IP’s foodservice business were at record levels.
International Paper recorded an Ilim joint venture equity loss of $136 million in the fourth quarter of 2014 compared with an equity loss of $70 million in the third quarter of 2014. With respect to Ilim’s U.S. dollar denominated net debt, the Company recognized a non-cash after-tax foreign exchange loss of $171 million in the fourth quarter of 2014 ($0.40 per share), compared with an after-tax loss of $82 million in the third quarter of 2014, largely due to foreign exchange movement in the U.S. dollar versus the Russian ruble. Operating earnings improved quarter over quarter, reflecting higher sales volumes, strong operations and margin expansion.
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