International Paper Company IP is scheduled to report its fourth-quarter 2024 results on Jan. 30, before the opening bell.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
The Zacks Consensus Estimate for IP’s fourth-quarter revenues is pegged at $4.72 billion, indicating 2.7% growth from the year-ago figure. The consensus estimate for earnings is pegged at six cents per share.
The Zacks Consensus Estimate for IP’s earnings has remained constant in the past 60 days. The estimate indicates a year-over-year plunge of 85.4%.
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IP’s Earnings Surprise History
International Paper’s earnings beat the Zacks Consensus Estimates in three of the trailing four quarters and missed on one occasion, the average surprise being 28.83%.
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What the Zacks Model Unveils for International Paper
Our proven model does not conclusively predict an earnings beat for IP this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat.
But that is not the case here, as you can see below. You can uncover the best stocks before they are reported with our Earnings ESP Filter.
Earnings ESP: International Paper has an Earnings ESP of 0.00% at present.
Zacks Rank: The company currently sports a Zacks Rank of 1.
Factors Likely to Have Shaped IP’s Q4 Performance
International Paper noted a pickup in demand this year after softness through the major part of 2023 due to inventory destocking at customers’ end. The company has been seeing stable demand in the e-commerce channel as packaging plays a critical role in the supply chain to bring essential products to consumers.
However, volumes are expected to have been down in the quarter reflecting two fewer shipping days. This is expected to have been offset by higher prices and favorable input costs.
The Industrial Packaging segment is likely to have witnessed a year-over-year decline in volume in corrugating packaging volumes (5.8%), containerboard (1.6%), EMEA Packaging (7.1%), Recycling (0.7%) and Gypsum/Release Kraft (2.2%). This is likely to have been somewhat offset by a 14.3% increase in Saturated Kraft.
Overall, volumes for the Industrial Packaging segment are projected to be 3,904 thousand short tons, which indicates a 4.2% year-over-year drop. Our estimate for containerboard volumes is 770 thousand short tons, which indicates year-over-year decline of 1.6%. Corrugated packaging is estimated at around 2,191 thousand short tons, 5.8% lower than the fourth quarter of 2023.
We expect average realized pricing for the Industrial Packaging segment to be 6.7% higher year over year. Our model projects Industrial Packaging revenues to be $3.93 billion, which indicates 2.2% year-over-year growth as higher prices are expected to have offset lower volumes.
The segment’s margin is likely to have been hurt by higher seasonal costs and an increase in depreciation costs, due to the five packaging facility closures in the fourth quarter. Input costs are expected to have a favorable impact on profits. Our model projects the segment’s quarterly operating profit to plunge 20% to $252 million.
We expect the Global Cellulose Fibers segment’s volumes to be 648 thousand metric tons, indicating a 4.1% year-over-year dip. Pricing is expected to rise 13.1% year over year. The segment’s fourth-quarter revenues, per our model, are estimated to be $711 million, implying growth of 8.4% from the year-ago quarter’s level. The improvement will be mainly driven by higher prices in the quarter despite the lower volume projections.
The segment is expected to report an operating loss of $235 million, wider than the year-ago quarter’s loss of $58 million. The segment’s operating profit is expected to be lower sequentially by $275 million, which includes the impact of accelerated depreciation ($220 million) due to the closure of the Georgetown mill in the fourth quarter. This is expected to lead to a loss in the quarter. Higher planned maintenance outage expense is also expected to have hurt profits. Input costs are expected to have been stable.
International Paper Stock's Price Performance
Shares of International Paper have gained 55.7% in the past year compared with the industry's 46.1% growth.
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Stocks to Consider
Here are some companies in the basic materials space, which according to our model, have the right combination of elements to post an earnings beat this quarter:
Methanex Corporation MEOH, slated to release earnings on Jan. 29, has an Earnings ESP of +24.91% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for MEOH’s earnings for the fourth quarter is currently pegged at 94 cents per share. The estimate indicates year-over-year growth of 80.8%. Methanex has a trailing four-quarter average surprise of 101%.
ATI Inc. ATI, slated to release earnings on Feb. 4, has an Earnings ESP of +3.91% and a Zacks Rank of 3 at present.
The consensus mark for ATI’s fourth-quarter earnings is currently pegged at 60 cents per share. It indicates a year-over-year decline of 6.25%. ATI has a trailing four-quarter average surprise of 3.7%.
Kinross Gold Corporation KGC, scheduled to release fourth-quarter earnings on Feb. 12, has an Earnings ESP of +36.76%.
The Zacks Consensus Estimate for Kinross Gold's earnings for the fourth quarter is currently pegged at 23 cents per share, indicating year-over-year growth of 109%. KGC currently carries a Zacks Rank of 3. It has a trailing four-quarter average surprise of 32.5%.
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