International Paper Company (IP) decided to sell 163,000 acres of properties located in the southeastern United States for approximately $200 million in order to complete the process of monetization of its forest land and realty holdings. International Paper will sell the property to an affiliate of Rock Creek Capital.
The sale is expected to close in the third quarter of 2010. International Paper will initially receive $160 million and the remaining balance along with interest within three years from the date of sale. International Paper will also receive 20% of the affiliates’ profit when it reaches certain financial returns.
International Paper has been impacted by dwindling demand and a rise in input costs, forcing it to shut down plants to minimize losses. The sale of assets will provide the company much-needed funds to participate in an improving real estate market.
We are pleased with International Paper’s move to monetize its forest land and use the proceeds in a more productive manner. The market too reacted positively to this news, as reflected in a $1.49 per share, or 6%, gain in the shares over the last two days of trading, closing at $24.98.
International Paper ended the first quarter of 2010 with operating earnings of 4 cents per share. The second-quarter earnings of the company are expected to be substantially higher than the previous quarter, the Zacks Digest estimate for the second quarter being 40 cents.
The Zacks Consensus Estimate for earnings per share in fiscal year 2010 and fiscal year 2011 are $1.88 per share and $1.64 per share, respectively.
Forecast for total revenues in second-quarter 2010, fiscal year 2010 and fiscal year 2011 are $6.2 billion, $24.8 billion and $25.6 billion, respectively.
We presently have a short-term Zacks # 3 Rank (Hold) on the stock.
Based in Memphis, Tennessee, International Paper Company operates as a paper and packaging company with an international presence. The main competitors of the company are MeadWestvaco Corporation (MWV) and Weyerhaeuser Co. (WY).
The sale is expected to close in the third quarter of 2010. International Paper will initially receive $160 million and the remaining balance along with interest within three years from the date of sale. International Paper will also receive 20% of the affiliates’ profit when it reaches certain financial returns.
International Paper has been impacted by dwindling demand and a rise in input costs, forcing it to shut down plants to minimize losses. The sale of assets will provide the company much-needed funds to participate in an improving real estate market.
We are pleased with International Paper’s move to monetize its forest land and use the proceeds in a more productive manner. The market too reacted positively to this news, as reflected in a $1.49 per share, or 6%, gain in the shares over the last two days of trading, closing at $24.98.
International Paper ended the first quarter of 2010 with operating earnings of 4 cents per share. The second-quarter earnings of the company are expected to be substantially higher than the previous quarter, the Zacks Digest estimate for the second quarter being 40 cents.
The Zacks Consensus Estimate for earnings per share in fiscal year 2010 and fiscal year 2011 are $1.88 per share and $1.64 per share, respectively.
Forecast for total revenues in second-quarter 2010, fiscal year 2010 and fiscal year 2011 are $6.2 billion, $24.8 billion and $25.6 billion, respectively.
We presently have a short-term Zacks # 3 Rank (Hold) on the stock.
Based in Memphis, Tennessee, International Paper Company operates as a paper and packaging company with an international presence. The main competitors of the company are MeadWestvaco Corporation (MWV) and Weyerhaeuser Co. (WY).
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