International Paper Company IP is scheduled to report second-quarter 2020 results, before the opening bell on Jul 30.
Q2 Estimates
The Zacks Consensus Estimate for International Paper’s second-quarter earnings is currently pegged at 38 cents, indicating a significant decline of 67% from the year-ago quarter. Moreover, the Zacks Consensus Estimate for total sales stands at $5.11 billion for the to-be-reported quarter, suggesting a decline of 9.8% from the prior-year quarter.
Q1 Performance
In the last reported quarter, International Paper’s earnings and revenues both declined on a year-over-year basis. However, the company beat the Zacks Consensus Estimate on both counts.
Notably, International Paper beat estimates in each of the trailing four quarters, the average surprise being 15.6%.
International Paper Company Price and EPS Surprise
Factors to Note
International Paper’s products are essential to produce and deliver food, pharmaceuticals, hygiene products and emergency supplies for consumers globally. Additionally, the coronavirus pandemic has been fueling e-commerce growth as consumers’ demand for online grocery, beverage and pharmaceuticals delivery services has skyrocketed following the containment measures imposed by governments globally. These factors might get reflected in International Paper’s second-quarter top line.
However, soft price and mix, lower volume and higher input costs owing to higher recovered fiber cost may have negatively impacted Industrial Packaging segment’s second-quarter performance. The Zacks Consensus Estimate for the segment’s revenues is currently pegged at $3,694 million, suggesting a decline of 4% year over year. The segment’s operating profit for the quarter is projected to decline 31% year over year to $352 million.
The Zacks Consensus Estimate for the Printing Papers segment revenues is pegged at $803 million, suggesting a decline of 26% from the prior-year quarter. Paper consumption in schools, offices and businesses has been impacted by the coronavirus pandemic, consequently straining paper demand. The company has also been experiencing unprecedented decline in commercial printing segments due to the significant pullback in print advertising. The segment is expected to report an operating loss of $26.9 million in second-quarter 2020 compared with an operating loss of $33 million in prior-year quarter.
In the Global Cellulose Fibers business, lower volumes and elevated operational costs might have weighed on the segment’s second-quarter performance. The Zacks Consensus Estimate for the segment’s revenues is pegged at $579 million for the quarter to be reported, suggesting a decline of 12% from the year-ago period. This segment is expected to incur an operating loss of $34.7 million in the second quarter compared with the operating loss of $32 million in the prior-year period.
Earnings Whispers
Our proven model doesn’t conclusively predict an earnings beat for International Paper this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: The Earnings ESP for International Paper is -4.00%.
Zacks Rank: International Paper currently carries a Zacks Rank of 2.
Price Performance
Shares of International Paper have lost 18.1% in the past year compared with the industry‘s decline of 15.7%
Stocks Poised to Beat Estimates
Here are some companies in the basic materials space you may want to consider as our model shows that these have the right combination of elements to post earnings beat this quarter:
Kinross Gold Corporation KGC currently has a Zacks Rank #2 and an Earnings ESP of +3.70%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Eastman Chemical Company EMN has an Earnings ESP of +2.61% and a Zacks Rank of 3 currently.
Fortuna Silver Mines Inc. FSM has an Earnings ESP of +50.00% and a Zacks Rank #3.
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