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International Paper (IP) to Shut Down Mill in Texas' Orange
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International Paper Company (IP - Free Report) announced the permanent closure of its containerboard mill in Orange, TX. The company will also permanently cease production on the #20 machine in Riegelwood, NC, and the #4 machine in Pensacola, FL . These actions will help International Paper in further strengthening and optimizing its manufacturing system to meet customers' needs.
The closing of the Orange mill will cut the company's containerboard capacity by about 800,000 tons. The pulp shutdowns will lower IP's pulp capacity by about 500,000 tons (300,000 tons of fluff pulp and 200,000 tons of southern bleached softwood).
The Orange mill and the #20 machine in Riegelwood are expected to close at the end of the year. The Pensacola #4 machine is currently idle and will not be restarted.
These shutdowns will impact around 900 job positions. The corporation intends to use current vacancies, retirements, normal attrition and other roles at International Paper to minimize the impact on its employees.
International Paper’s remaining North America containerboard mill system will consist of 17 mills with an annual production capability of 13 million tons. The company's remaining pulp mill system will have eight mills with a yearly capacity of 2.7 million tons.
Containerboard volumes in the second quarter of 2023 were 600 thousand short tons, representing a year-over-year drop of 15%. The figure lagged our estimate of 628.1 thousand short tons.
In the second quarter, International Paper reported adjusted earnings of 59 cents per share, surpassing the Zacks Consensus Estimate of 42 cents by a 40% margin. The bottom line declined 40% year over year, reflecting lower volumes in its segments due to the current weak demand environment and customer inventory destocking.
Net sales were $4.68 billion in the quarter under review, down 13% from the year-ago quarter. The top line missed the Zacks Consensus Estimate of $4.94 billion.
Let’s take a look at IP peers’ last reported earnings.
WestRock reported adjusted earnings of 89 cents per share in third-quarter fiscal 2023. The company's bottom line declined 42% year over year. WestRock’s total revenues declined 7% year over year to $5,121 billion. WRK has an average trailing four-quarter earnings surprise of 14.9%.
Rayonier Advanced Materials reported an adjusted loss of 25 cents per share in second-quarter 2023. Notably, it posted an adjusted loss of 31 cents in the year-ago quarter. The company’s total revenues declined 3.5% year over year to $385 million. RYAM has an average trailing four-quarter earnings surprise of 42.8%.
Mercer International reported an adjusted loss of $1.48 per share in second-quarter 2023. It posted adjusted earnings of $1.07 in the year-ago quarter. The company’s total revenues declined 7.3% year over year to $530 million. MERC has an average trailing four-quarter negative earnings surprise of 75.9%.
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International Paper (IP) to Shut Down Mill in Texas' Orange
International Paper Company (IP - Free Report) announced the permanent closure of its containerboard mill in Orange, TX. The company will also permanently cease production on the #20 machine in Riegelwood, NC, and the #4 machine in Pensacola, FL . These actions will help International Paper in further strengthening and optimizing its manufacturing system to meet customers' needs.
The closing of the Orange mill will cut the company's containerboard capacity by about 800,000 tons. The pulp shutdowns will lower IP's pulp capacity by about 500,000 tons (300,000 tons of fluff pulp and 200,000 tons of southern bleached softwood).
The Orange mill and the #20 machine in Riegelwood are expected to close at the end of the year. The Pensacola #4 machine is currently idle and will not be restarted.
These shutdowns will impact around 900 job positions. The corporation intends to use current vacancies, retirements, normal attrition and other roles at International Paper to minimize the impact on its employees.
International Paper’s remaining North America containerboard mill system will consist of 17 mills with an annual production capability of 13 million tons. The company's remaining pulp mill system will have eight mills with a yearly capacity of 2.7 million tons.
Containerboard volumes in the second quarter of 2023 were 600 thousand short tons, representing a year-over-year drop of 15%. The figure lagged our estimate of 628.1 thousand short tons.
In the second quarter, International Paper reported adjusted earnings of 59 cents per share, surpassing the Zacks Consensus Estimate of 42 cents by a 40% margin. The bottom line declined 40% year over year, reflecting lower volumes in its segments due to the current weak demand environment and customer inventory destocking.
Net sales were $4.68 billion in the quarter under review, down 13% from the year-ago quarter. The top line missed the Zacks Consensus Estimate of $4.94 billion.
International Paper, along with WestRock Company , Rayonier Advanced Materials Inc. (RYAM - Free Report) and Mercer International Inc. (MERC - Free Report) , is part of the Paper and Related Products industry.
Let’s take a look at IP peers’ last reported earnings.
WestRock reported adjusted earnings of 89 cents per share in third-quarter fiscal 2023. The company's bottom line declined 42% year over year. WestRock’s total revenues declined 7% year over year to $5,121 billion. WRK has an average trailing four-quarter earnings surprise of 14.9%.
Rayonier Advanced Materials reported an adjusted loss of 25 cents per share in second-quarter 2023. Notably, it posted an adjusted loss of 31 cents in the year-ago quarter. The company’s total revenues declined 3.5% year over year to $385 million. RYAM has an average trailing four-quarter earnings surprise of 42.8%.
Mercer International reported an adjusted loss of $1.48 per share in second-quarter 2023. It posted adjusted earnings of $1.07 in the year-ago quarter. The company’s total revenues declined 7.3% year over year to $530 million. MERC has an average trailing four-quarter negative earnings surprise of 75.9%.