International Paper Q3 Beats Market, Mulls Options For GCF Unit; Stock Up In Pre-market

(RTTNews) - International Paper (IP) reported Thursday weak profit in its third quarter, but above market estimates. Separately, the company announced that it has decided to review strategic options for its global cellulose fibers or GCF business, in line with its strategy to focus on sustainable packaging solutions.

In pre-market activity on the NYSE, International Paper shares were gaining around 7.1 percent to trade at $52.51.

The producer of sustainable packaging, pulp and other fiber-based products also announced the permanent closure of its Georgetown, South Carolina mill. The shutting down of the mill will be in stages, with a full closure expected by the end of 2024. In total, 526 hourly employees and 148 salaried employees will be impacted.

IP's GCF business creates safe, high-quality absorbent pulp for a wide range of applications like feminine care, incontinence and other personal care products that promote health and wellness. The GCF business generated $2.9 billion in revenue in 2023 and has operations in three countries, with eight mills and two converting facilities.

The company said the review of strategic options is at an early stage, and there can be no assurance that this review will result in any kind of transaction or other outcome.

The Georgetown mill produces around 300,000 tons of fluff pulp designed for a range of consumer applications from baby diapers to incontinence products. GCF plans to retain 100 percent of the mill's fluff pulp capacity by transferring production to other mills and further reducing the company's exposure to commodity pulp grades.

All employees will be offered severance benefits, outplacement services and access to mental health resources.

In its third quarter, International Paper's earnings totaled $150 million or $0.42 per share, compared to $165 million or $0.47 per share.

Adjusted earnings were $153 million or $0.44 per share for the period. Analysts on average had expected the company to earn $0.26 per share, according to figures compiled by Thomson Reuters. Analysts' estimates typically exclude special items.

The company's revenue for the quarter rose 1.6 percent to $4.686 billion from $4.613 billion last year.

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