International's Third Quarter Earnings Report

International Paper (NYSE:IP) announced its results for the most recent quarter on October 25, 2012. International Paper is a global paper and packaging company with operations in North America, Europe, Latin America, Russia, Asia and North Africa.

Earnings play an important role in measuring the appropriate valuation for a stock. Investors should be cautious if the company's stock price is high but it consistently has low earnings. SEE: How To Decode A Company's Earnings Reports

The Numbers: Both EPS and revenues failed to meet expectations as International posted 54 cents per share and revenues of $7.03 billion. Analysts were expecting 77 cents per share and revenues of $7.31 billion. EPS fell 50% while revenue climbed 5.9% from the same period last year. International's revenue has grown during each of the past three quarters on a year-over-year basis. International's profit for the third quarter was down 49.4% to $237 million.



Management Quote: "The company generated excellent cash flow in the third quarter, despite the backdrop of slow global economic growth," said John Faraci, Chairman and Chief Executive Officer. "Looking ahead to next year, many of our key strategic projects will be ramping up around the globe. This, along with our earnings trajectory in North America Industrial Packaging, will allow us to deliver significant progress on our earnings and cash flow runway as we head into 2013."



Looking Ahead: Next quarter's results are expected to be more favorable for the company. Over the past 60 days, the average estimate for the fourth quarter has reached 75 cents per share, up from 68 cents. When analyst increase earnings estimates investors can assume business has been stronger than first thought and is an encouraging sign for investors. For the fiscal year, the average estimate has moved up from $2.49 a share to $2.56 over the last 60 days.