The 10-second takeaway
For the quarter ended Sep. 30 (Q3), International Paper met expectations on revenues and missed estimates on earnings per share.
Compared to the prior-year quarter, revenue increased and GAAP earnings per share contracted significantly.
Margins dropped across the board.
International Paper reported revenue of $7.03 billion. The nine analysts polled by S&P Capital IQ foresaw revenue of $7.12 billion on the same basis. GAAP reported sales were 5.9% higher than the prior-year quarter's $6.63 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.75. The 15 earnings estimates compiled by S&P Capital IQ predicted $0.77 per share. GAAP EPS of $0.54 for Q3 were 55% lower than the prior-year quarter's $1.19 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 26.8%, 90 basis points worse than the prior-year quarter. Operating margin was 7.6%, 210 basis points worse than the prior-year quarter. Net margin was 3.4%, 440 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $7.09 billion. On the bottom line, the average EPS estimate is $0.75.
Next year's average estimate for revenue is $27.96 billion. The average EPS estimate is $2.57.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 439 members out of 506 rating the stock outperform, and 67 members rating it underperform. Among 143 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 135 give International Paper a green thumbs-up, and eight give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on International Paper is outperform, with an average price target of $40.47.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.