International Paper Second Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component International Paper (NYSE:IP) will unveil its latest earnings on Thursday, July 26, 2012. International Paper is a global paper and packaging company with operations in North America, Europe, Latin America, Russia, Asia and North Africa.

International Paper Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for net income of 47 cents per share, a decline of 41.3% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved down from 57 cents. Between one and three months ago, the average estimate moved down. It also has dropped from 49 cents during the last month. Analysts are projecting profit to rise by 16.1% compared to last year’s $2.60.

Past Earnings Performance: Last quarter, the company beat estimates by 6 cents, coming in at profit of 57 cents a share versus the estimate of net income of 51 cents a share. It marked the fourth straight quarter of beating estimates.

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A Look Back: In the first quarter, profit fell 45% to $188 million (43 cents a share) from $342 million (78 cents a share) the year earlier, but exceeded analyst expectations. Revenue rose 4.2% to $6.66 billion from $6.39 billion.

Stock Price Performance: From June 21, 2012 to July 20, 2012, the stock price rose $3.42 (11.8%), from $28.87 to $32.29. The stock price saw one of its best stretches over the last year between December 30, 2011 and January 10, 2012, when shares rose for seven straight days, increasing 5.8% (+$1.72) over that span. It saw one of its worst periods between May 1, 2012 and May 10, 2012 when shares fell for eight straight days, dropping 6.5% (-$2.16) over that span.

Wall St. Revenue Expectations: On average, analysts predict $7.31 billion in revenue this quarter, a rise of 9.9% from the year-ago quarter. Analysts are forecasting total revenue of $28.35 billion for the year, a rise of 8.9% from last year’s revenue of $26.03 billion.

Key Stats:

An income boost this time around would be welcome news after profit declines in the past two quarters. Net income dropped 18.7% in the fourth quarter of the last fiscal year and then again in the first quarter.

On the top line, the company is looking to build a positive trend after last quarter’s growth snapped a string of drops. Revenue fell 1.3% in the third quarter of the last fiscal year and 2.5% in the fourth quarter of the last fiscal year before climbing in the first quarter.

Analyst Ratings: With 10 analysts rating the stock a buy, none rating it a sell and two rating the stock a hold, there are indications of a bullish stance by analysts.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.83 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term. The company regressed in this liquidity measure from 2.21 in the fourth quarter of the last fiscal year to the last quarter driven in part by a decrease in current assets. Current assets decreased 11.9% to $9.21 billion while liabilities rose by 6.2% to $5.03 billion.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)

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