International Paper (IP) has reported 22.47 percent rise in profit for the quarter ended Dec. 31, 2016. The company has earned $218 million, or $0.53 a share in the quarter, compared with $178 million, or $0.43 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $303 million, or $0.73 a share compared with $361 million or $0.87 a share, a year ago.
Revenue during the quarter went down marginally by 1.14 percent to $5,381 million from $5,443 million in the previous year period. Gross margin for the quarter contracted 158 basis points over the previous year period to 29.25 percent. Total expenses were 92.27 percent of quarterly revenues, down from 92.69 percent for the same period last year. This has led to an improvement of 42 basis points in operating margin to 7.73 percent.
Operating income for the quarter was $416 million, compared with $398 million in the previous year period.
"I’m pleased with another year of strong cash generation and returns solidly above the cost of capital,” said Mark Sutton, Chairman and Chief Executive Officer. "While we experienced margin pressure in 2016, we enter the new year with an improving economic climate and several catalysts which we expect to improve profitability across International Paper. We are focused on serving our customers, strong operations and margin improvement, along with integrating the newly acquired pulp business and driving synergies. We remain confident in our ability to create shareholder value through thoughtful capital allocation with a near-term focus on debt reduction."
Operating cash flow falls marginally
International Paper has generated cash of $2,478 million from operating activities during the year, down 3.95 percent or $102 million, when compared with the last year. The company has spent $3,498 million cash to meet investing activities during the year as against cash outgo of $1,739 million in the last year. It has incurred net capital expenditure of $1,329 million on net basis during the year, down 8.34 percent or $121 million from year ago.
Cash flow from financing activities was $982 million for the year as against cash outgo of $1,601 million in the last year period.
Cash and cash equivalents stood at $1,033 million as on Dec. 31, 2016, down 1.62 percent or $17 million from $1,050 million on Dec. 31, 2015.
Working capital increases
International Paper has recorded an increase in the working capital over the last year. It stood at $2,897 million as at Dec. 31, 2016, up 13.47 percent or $344 million from $2,553 million on Dec. 31, 2015. Current ratio was at 1.71 as on Dec. 31, 2016, up from 1.65 on Dec. 31, 2015.
Debt moves up
International Paper has witnessed an increase in total debt over the last one year. It stood at $11,314 million as on Dec. 31, 2016, up 22.05 percent or $2,044 million from $9,270 million on Dec. 31, 2015. Total debt was 33.93 percent of total assets as on Dec. 31, 2016, compared with 30.31 percent on Dec. 31, 2015. Debt to equity ratio was at 2.60 as on Dec. 31, 2016, up from 2.37 as on Dec. 31, 2015. Interest coverage ratio improved to 3.06 for the quarter from 2.99 for the same period last year. Disclaimer: Please note that this is an auto-generated article. IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website. For queries contact: [email protected]
