Bloomberg News

International Paper Profit to Gain on Partnerships, CEO Says

November 01, 2011

(Updates with closing share price in last paragraph.)

Oct. 27 (Bloomberg) -- International Paper Co., the largest pulp and paper maker, expects profit to improve next year on contributions from joint ventures in India and Russia and the integration of rival Temple-Inland Inc.

“As we look to 2012, we’ve got lots of things that will enable us to improve,” International Paper Chief Executive Officer John Faraci said today in a telephone interview from the company’s headquarters in Memphis, Tennessee. “We have more earnings runway ahead of us, even in a challenging economic environment.”

International Paper’s net income increased to $518 million, or $1.19 a share, from $397 million, or 91 cents, a year earlier, the company said today in a statement. Excluding acquisition costs and a writedown of its Shorewood packaging unit, per-share profit was a record 92 cents, more than the 80- cent average of 11 analysts’ estimates compiled by Bloomberg.

The paper and packaging company is expected to earn $3.02 a share in 2012, according to the average of 12 analysts’ estimates, up from an estimated $2.98 this year, according to data compiled by Bloomberg.

International Paper said Sept. 6 it agreed to acquire Austin, Texas-based Temple-Inland for $3.7 billion after a three-month battle for the maker of shipping boxes. Faraci said he expects the deal to be completed in the coming months.

International Paper will also benefit next year from increased investments in Russia’s paper industry, where it has a joint venture with Ilim Group, he said.

In India, International Paper this year agreed to buy a 75 percent stake in Andhra Pradesh Paper Mills Ltd. for $420 million as a base for further investments in the world’s second- most populous nation.

International Paper rose 8.9 percent to close at $27.95in New York.

--Editors: Jasmina Kelemen, Tina Davis

To contact the reporters on this story: Christopher Donville in Vancouver at cjdonville@bloomberg.net.

To contact the editor responsible for this story: Simon Casey at scasey4@bloomberg.net.


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