[International Paper Company Logo]
2 MANHATTANVILLE ROAD
PURCHASE, NY 10577-2196
NEWS RELEASE
Media Contacts: Analyst Contacts:
Phillip Giaramita Carol Tutundgy
(914) 397-1665 (914) 397-1632
Molly Sullivan Brian Turcotte
(914) 397-1652 (914) 397-1623
INTERNATIONAL PAPER REPORTS FIRST-QUARTER EARNINGS
OF $75 MILLION, OR $.25 A SHARE
APRIL 14, 1998
PURCHASE, NY.-International Paper reported first-quarter 1998 net earnings
of $75 million, or $.25 a share, compared with last year's first-quarter
earnings of $34 million, or $.11 a share, and fourth-quarter earnings
before special items of $115 million, or $.38 per share.
First-quarter 1998 net sales were $4.9 billion, even with last year's
first-quarter sales. Fourth-quarter 1997 sales were $5.1 billion.
"Although the economic problems is Southeast Asia continue to
affect some of our major businesses, particularly Carter Holtz Harvey,
we've made significant progress in completing our restructuring program
that was announced last July," said John T. Dillion, chairman and chief
executive officer. "We recently completed the sale of most of our imaging
businesses, and Carter Holt Harvey has concluded the sale of its building
products businesses. We expect to announce the sale of our Veratec
nonwovens business, our label business and several facilities within our
decorative products division within the next several weeks."
"Due to wet weather conditions in the South, our wood costs were
much higher than expected, "Dillon said. "However, these costs were
partially offset by lower purchase prices for other raw materials and the
continued success of our cost-reduction program. Our facilities also ran
extremely well."
In 1998's first quarter, earnings for the printing papers segment
decreased from the 1997 fourth quarter mainly due to the poor pulp market
and lower sales volumes for uncoated grades. However, sales for coated
grades were up, reflecting the success of Accolade, the new lightweight
coated product introduced last year. Demand for coated groundwood remained
strong throughout the quarter, and a groundwood price increase went into
effect in January.
Earnings from the company's packaging business were up from the
previous quarter. While prices for corrugated boxes improved significantly,
pricing and demand for bleached board weakened somewhat, and the company
reduced production to control inventories at some of its bleached board
mills.
Despite a strong quarter for Arizona Chemical, speciality products'
earnings were down considerably from the previous quarter due to weak
pricing for oil and gas, and losses associated with the imaging business,
which is in the process of being sold.
Earnings from the forest products business were substantially down
from the previous quarter. Harvest levels were lower than last year's
record highs. Earnings for the company's distribution business, xpedx, were
off due to lower margins.
Results for New Zealand-based Carter Holt Harvey were lower than
the previous quarter primarily because of the Asian economic slowdown's
adverse impact, which particularly affected log exports and pulp prices.
Over the course of the quarter, several important developments took
place: International Paper entered into a new joint-venture with Olmuka in
Turkey for the manufacture of containerboard and corrugated boxes for local
and European markets and announced a plan to merge with Weston Paper, a
corrugated manufacturer serving markets in the United States.
Carter Holt Harvey acquired Australian-based Continental Cup Co.
This will allow Carter Holt Harvey and International Paper's subsidiary,
Imperial Bondware, to offer a full line of food service products in the
Australia-New Zealand markets. Carter Holt Harvey also acquired Riverwood
International Corp.'s Australian-based folding carton business.
International Paper, in its 100th year of operation, is a worldwide
producer of printing papers, packaging and forest products. The company
also operates specialty businesses in global markets as well as a
broadly-based distribution network. Headquartered in Purchase, N.Y., the
company has operations in 31 countries, employs more than 80,000 people and
exports its products to more than 130 nations.
# # #
INTERNATIONAL PAPER COMPANY
SALES BY SEGMENT
PRELIMINARY AND UNAUDITED
(IN MILLIONS OF DOLLARS)
Three Months Ended
March 31,
---------------------
1998 1997
---------- -----
Printing Papers $ 1,380 $ 1,380
Packaging 1,200 1,190
Distribution 1,225 1,090
Specialty Products 750 860
Forest Products 590 605
Less: Intersegment Sales (277) (263)
--------- ------------
Net Sales $ 4,868 $ 4,862
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The above amounts include Carter Holt Harvey net sales of $415 million in
the first quarter of 1998 and $470 million in the first quarter of 1997.
The New Zealand dollar weakened approximately 15% against the U.S. dollar.
INTERNATIONAL PAPER COMPANY
SUMMARY OF CONSOLIDATED EARNINGS
PRELIMINARY AND UNAUDITED
(IN MILLIONS EXCEPT FOR NET SALES AND PER SHARE AMOUNTS)
THREE MONTHS ENDED
MARCH 31
1998 1997
NET SALES (IN BILLIONS) $ 4.9 $ 4.9
------ -----
EARNINGS BEFORE INTEREST, INCOME TAXES AND 268 238
MINORITY INTEREST
Interest expense, net 127 130
---- ----
EARNINGS BEFORE INCOME TAXES AND 141 108
MINORITY INTEREST
Income tax provision 46 40
Minority interest expense, net of taxes 20 34
---- ----
NET EARNINGS $ 75 $ 34
==== ====
EARNINGS PER COMMON SHARE $0.25 $0.11
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EARNINGS PER COMMON SHARE - ASSUMING DILUTION $0.25 $0.11
==== ====
AVERAGE SHARES OUTSTANDING 302.3 300.6
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