IP posted a loss of 24 cents a share last quarter compared to the $4.25 loss from the previous year. Sales fell 9% for last quarter. For 2009 year IP earned $663million, or $1.55 a share. The losses for 2008 were attributable to a $1.8billion write-off related to the shrinking paper business and restructuring charges.
Throughout 2009 IP lowered its debt, overhead, and cut costs by cutting employees and closing unsuccessful paper mills. They fired 10,000 employees since June 2008 and took steps to improve its balance sheet. Shares fell 5% on Wednesday, due in large part to the company saying that rising input prices would hurt their bottom line in the 1st quarter. Input prices are expected to increase up to $120million in the Q1 2010, compared to $36million in Q4 2009. The increased costs are attributed to the wet and cold whether in the south which made it difficult to harvest the fiber. This led to increased energy consumption and increased distribution costs due to the lack of wood. January and February will be tough months for IP, but the Q2 is expected to be better.
"We have announced price increases for all of our global manufacturing businesses and we are getting good implementation, but not as quickly as input costs may go up,"
-CEO John Faraci