International Paper reported first quarter net earnings (loss) of $(141)m, compared with $165m in the fourth quarter of 2019 and $424m in the first quarter of 2019. The net earnings included an after-tax charge of $337m for the impairment of the net assets and write-off of foreign currency translation adjustment following the announcement of the sale of the Brazil Packaging business.
First quarter adjusted operating earnings (non-GAAP) were $226m compared with $430m in the fourth quarter of 2019 and $447m in the first quarter of 2019.
Industrial Packaging operating profits in the first quarter of 2020 were $470m compared with $605m in the fourth quarter of 2019. In North America, earnings decreased due to lower sales prices for boxes and export containerboard, higher planned maintenance outage expenses and higher operating costs driven by the Riverdale (Selma, Alabama) mill conversion. Demand for export containerboard improved and input costs were lower, primarily for energy. Earnings were negatively impacted by the non-repeat of a favorable inventory valuation adjustment in the fourth quarter of 2019. In Europe, earnings improved driven by seasonally higher volumes, primarily in Morocco and Turkey and continued performance improvements at the Madrid, Spain mill, slightly offset by unfavorable foreign currency impacts, primarily in Morocco.
“International Paper had a solid first quarter in a rapidly changing environment as the impact of the COVID-19 pandemic and containment measures accelerated,” said Mark Sutton, Chairman and Chief Executive Officer. “International Paper entered this crisis in a position of strength due to our committed employees, our diverse customer base, our world-class manufacturing and supply chain capabilities and solid financial footing. Given the unprecedented uncertainty regarding the ultimate economic impact of COVID-19, we are taking prudent steps to further strengthen the company’s liquidity.”
